Gender Balance in Australian Boardrooms: The Business Case for Quotas

Abstract

This chapter examines the current Australian policy position of ‘soft regulatory intervention’ to increase women in corporate leadership positions and assesses the potential benefits of enacting mandatory gender quota legislation. The first section of this chapter examines the global context of gender diversity. Many governments in Europe have put in place mandatory quotas for women on corporate boards backed by legal sanctions. Others, including Australia, have taken a softer voluntary approach by recommending that companies set targets and/or disclose policy on gender diversity. Our chapter draws on relevant literature both supportive and opposed to gender diversity on boards falling within two broad categories of arguments, namely fairness, equity and psychology in the context of responsible business practices and value in the context of firm performance. Boardroom diversity effects on performance of firms will then be analyzed as an evolving argument for legislative quotas. The second part of this chapter explores the importance of improving corporate culture to be more inclusive of women in leadership positions and diminishing male-dominated groupthink in corporations, before examining the gender of leaders and executives in the political and academic sectors. Finally, this chapter concludes in arguing that despite progress of increasing gender diversity in Australia via the soft policy and regulatory approach by ASX, the need for a long-term plan is evident, owing to the complexities of the issue and the current slow progress of women on Australian corporate boards. Therefore, coercive legislative measures in the form of mandatory legislated diversity quotas are needed as an adjunct to the current ‘soft regulatory’ measures in Australia. It is clear the appetite for change persists, as demonstrated by the volume of literature and reports examining the issue of increasing board diversity in Australia.