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The past year has seen the introduction of some key initiatives targeted at achieving gender equality in the workplace. While the women’s rights movement has long advocated for women to receive equal employment opportunity with men, a focus has been to ensure men receive the same legal protections as women. In this way, it is argued, men and women can share responsibility for caring for children, parents and other family members.

The issue of equality between the sexes and gender diversity will be topical throughout the year with the government considering several reforms; and the effect of the recent amendments to the ASX Corporate Governance Principles and Recommendations (ASX Principles) on diversity becoming known as ASX companies publish their annual reports. 

As for the legal profession, The Australian’s 2011 partnership survey results to be released in June will provide valuable insight into how law firms are tracking in terms of gender diversity and whether specific industry-based reform is required.

Rationale for reform 

The rationale for instigating change in the gender diversity sphere is threefold, according to Federal Sex Discrimination Commissioner and Commissioner Responsible for Age Discrimination Elizabeth Broderick. First, there is a pure human-rights based reason for gender equality – as a birthright, she questions why we would settle for anything less than equality.

Second, Broderick cites the market power case for equality, in that women are major consumers of goods and services and should therefore have their voices represented at the decision-making table around those goods and services. For example, Jane Seymour, a partner at Gadens Lawyers, has found a growing trend in clients using their market power in selecting legal services providers: “Whenever we’re tendering now, [clients] want to know about sustainability and that covers a range of issues including workplace sustainability, which is gender diversity but [also] diversity of all types.”

The final reason is one which Broderick has found resonates most within organisations – the business case for diversity. According to Broderick, there is a correlation between organisations with a greater level of gender diversity and stronger corporate performance. While the link is not causal, Broderick states this connection has been verified by research. A McKinsey & Company study suggested that “companies where women are most strongly represented at board or top-management level are also the companies that perform best”.²  

A key change has been the recent announcement of reforms to the Equal Opportunity for Women in the Workplace Agency (EOWA) which will in effect alter the focus of the agency from providing women with the same opportunities as men, to equality for both men and women in the workplace. 

In announcing the EOWA reform, Minister for the Status of Women Kate Ellis called for an attitudinal change to the concept of equality. “We need to move beyond the outdated notion that women’s equality in the workplace is just about women.”³

Although the need for women to drive change remains, the importance of the role of men in achieving gender equality and diversity is being viewed as increasingly significant. As men currently hold the majority of leadership positions in organisations across Australia, it is men who are in a position to influence and drive change. Further, the concept of gender equality is not limited to equality in the workplace, but also requires equality in respect of caring responsibilities.

This process had been given real momentum by the introduction on 1 January 2010 of the right to request flexible work arrangements to care for children up to school age under the National Employment Standards. Seymour said this change was evident in trends she has encountered with her clients. “I think certainly that HR practitioners today would see in their work an increased willingness by men to actually seek flexible work arrangements, so [the amendment] is building on the changes that have been introduced by the National Employment Standards.”

The changing focus on gender diversity to encompass both sexes, rather than remaining in the female domain, is evident in the proposed reforms to EOWA and the Equal Opportunity for Women in the Workplace Act 1999. The proposed Workplace Gender Equality Act will see the name of EOWA changed to the Workplace Gender Equality Agency to ensure that the focal point of the agency is equality for men and women.⁵ Its budget has also been significantly increased to reflect its enhanced role. Helen Conway has been appointed as director, effective 27 April 2011.

Under the current EOWA regime, organisations with 100 or more employees must develop a workplace program aimed at eliminating discrimination and contributing to equal employment opportunity for women in the workplace, and submit annual reports to EOWA on their workplace programs and processes. Organisations that report and do not comply with EOWA are not eligible to tender for government contracts and are ‘named and shamed’ in Parliament.

One of the shortcomings of the current system is that although organisations are required to make themselves known to EOWA, one-third have failed to identify themselves. These organisations will be targeted under the reform. “There is definitely ‘upping the ante’ here from the government around this issue,” says Seymour.

In addition to the existing consequences of non-compliance, the proposed reform will mean that non-compliant organisations are excluded from government funding and industry programs. The agency will also have an inspectorate function and will audit organisations to ensure that information contained in reports is accurate and reflects what is occurring in practice. 

Other changes under the proposed Workplace Gender Equality Act include enshrining pay equity in the objects of the Act, streamlined reporting against gender equality indicators, providing the gender composition of the board and business as a whole, and requiring organisations to report annually on tangible outcomes, instead of workplace programs and processes. A new provision will require both the CEO and an employee representative to sign off on the accuracy of the report, which will then be made accessible to shareholders and employees. The power for the agency director to exempt organisations from reporting will also be removed so that all reporting organisations will be required to submit annual reports, without exception. 

The Workplace Gender Equality Act will be introduced to Parliament this year and the changes are intended to come into effect progressively up to 2013. Broderick feels the changes to EOWA are long overdue: “The main problem or accusation leveled at EOWA is that it just had no teeth – the naming and shaming in Parliament, I mean, who knew about that? No one did.”

In addition to legislative reforms aimed at gender equality, there has also been a renewed interest in the issue of gender diversity, particularly at an executive level. 

While women are present in almost equal numbers to men in the workforce as a whole, they remain increasingly under-represented in senior positions. Research shows that there are significantly fewer women on boards or chairs of ASX 200-listed companies.⁶ 

At board director level there are over 10 men to every woman.⁷ There are approximately 32 male CEOs to every female CEO, and only 2.5 per cent have a woman as chair. Men are also significantly over-represented on boards, comprising 91.6 per cent of the board of directors, with women only representing 8.4 per cent.⁸

In an attempt to increase gender diversity within ASX-listed companies, the ASX Principles were amended in June 2010 by the ASX Corporate Governance Council. On 1 January 2011, the amendments came into effect.

The changes to the ASX Principles mean that for financial years commencing on or after 1 January 2011, ASX-listed companies will be required to establish a diversity policy and disclose a copy of the policy or a summary of it. The policy should include requirements for the board to set measurable objectives for achieving gender diversity, and review the objectives and progress made in achieving them in the company’s annual report. Seymour says one of the key points the ASX Principles identify as an issue to address in the diversity policy and company plan is board transparency and linking key performance indicators to the achievement of those objectives for both the board and senior management team. She describes this recommendation as seeking to “change the boys’ club method of choosing board members”.

The effectiveness of the ASX Principles is evident. In 2002, women represented 8.2 per cent of the board of directors. In the eight-year period to 2010, this increased 0.2 per cent to 8.4 per cent, an increase described by Broderick as “glacial”. However, she considers that the ASX 200 companies are now heading in the right direction. “The good news is that over the last 12 months, in anticipation of the ASX corporate governance reforms ... the figure has now jumped as of 5 April [2011] to 11.6 per cent.”

While Seymour acknowledges that the rise is promising, she is cautious about the sustainability of the increases into the future. “Let’s see 18 months down the track if the initial momentum is going to die off and will need to then be pushed on with the Q-word,” says Seymour, referring to the much-debated quota system.

Within the legal services industry, female lawyers remain under-represented, particularly within the upper echelons of law firms. The Australian partnership survey undertaken in 2010 showed that in the six months prior to the survey, women accounted for only 22.4 per cent of all new partner appointments.⁹

Broderick noted that while many may argue that it is merit which underpins succession in law firms, the figures refute this premise. “It’s just clear that merit isn’t the basis on which people get to the top in law firms. The numbers speak for themselves, if you assume merit is distributed equally between the sexes.”¹⁰ 

Broderick fears that Australia’s lack of diversity will impact on our ability as a country to remain internationally competitive. From a global perspective, she considers that countries that do not utilise all of their available talent will find it increasingly difficult to compete globally. A comparison of how Australia is faring in terms of women at leadership level compared with our OECD counterparts shows that Australia has been trailing at the bottom of the list, followed only by Japan. “I was in the World Bank in late 2009,” says Broderick, “and it looks like Kuwait is starting to come up. When Kuwait overtakes Australia, I’ve got to give up on my job, I think, at that point.”

Far from giving up her job, Broderick is advocating for structural reforms to private legal practice in similar terms to the ASX Principles. “You need to start to put in some structural and systemic interventions [in law firms] to ensure women can compete at the same level as men.”¹¹ 

Where to from here remains to be seen, but for now, one thing we may be able to agree on is that law firms are all concerned about the bottom line. To this end, Broderick says, “If you believe in the power of business and building strong economies and creating optimum business performance then you will focus on this issue.”