The 'boys' club' mentality is impacting Australian boards' ability to make effective decisions around corporate social responsibility (CSR) initiatives, new research from the University of South Australia has found.
Analysing the impact of gender diversity on Australian boards, the research found that a lack of gender diversity results in biased and unbalanced decision making.
Lead researcher Dr Kathy Rao said that because women don't hold enough space at the top, important CSR initiatives can be disregarded.
"Women bring a unique set of values, perspectives and capabilities to top-level decision-making which can help boards address CSR issues in a more effective manner.
"But old-school attitudes tend to hold them back, partly because they don’t have a critical mass to push new ideas over the line, but also because there are a few powerful older male directors who are so focused on profit that they disregard CSR is ‘soft’ when it is raised by female directors.
"The challenge is, however, that CSR is incredibly important for ethical and sustainable business, so companies are essentially shooting themselves in the foot if they purposely, or inadvertently, avoid CSR strategies," she said.
Co-researcher and director of the UniSA Yunus Social Business Centre, Professor Carol Tilt added that unconscious bias adds to the problem when it comes to hiring for leadership roles.
"Board members’ lack of awareness of their own bias is perhaps the single most damaging factor for effective leadership.
"Australian companies need to be more proactive in offering training and incentives for more women to become actively involved in firm governance – and, to achieve this without regulatory pressures or token appointments simply to meet gender targets.
"Unfortunately, when boards look for new members, they’re often reluctant to appoint female members or candidates who have different experiences to their own, defeating the capacity to recruit a diversity of views.
"Such a blinkered approach to governance is highly risky, and while members may not know they’re operating in such a way, a lack of gender diversity almost guarantees this outcome.
"As you can appreciate, influence is king on boards; if you don’t have it, you can’t make much of an impact," she said.
The research follows the 2020 Chief Executive Women (CEW) Census report which states that the number of female CEOs leading ASX200 companies has fallen in the past year to ten, down from 12 in 2019 and at the lowest level since the CEW Census began four years ago.
The report also states that only three of 50 CEO appointments within the ASX200 in the past two years were women.
CEW president Sue Morphet said the evidence that greater diversity leads to improved company culture, more inclusive workforces and better decision making is clear.
"We know that if businesses take immediate action to remove systemic barriers for women, particularly in career-forming years, they will see the most talented and qualified people appointed to senior positions which will benefit their company performance, and their bottom line.
"Companies have been forced to think differently about how they operate and what the future looks like as a result of COVID-19 – now is the moment to use every opportunity to improve company results and support strong economic recovery," she said.