Broadening perspectives

So there we have it. For the second year running research has highlighted the correlation between having women on boards and higher returns on equity. Studies were performed on ASX 500 companies – those with female directors outperformed their male only peers by 6.7% over 3 years and 8.7% over 5 years. Not insignificant. Yet still, around half of those reviewed, Australia’s largest corporations, have boards consisting entirely of grey suits. Shareholders of slow moving companies should be up in arms.

This is hardly an epiphany. Darwin championed diversity - its byproducts of variation, competition and selection are compelling indeed. Diversity ensures survival of the species. Diversify or die. Or rather, when it comes to our investments, significantly underperform. We all know that, right? Those of us with portfolios skewed heavily towards shares as an asset class have felt the pain in the last few months. We know the drill – diversification smoothes our portfolio returns.

And this latest report gives us hard evidence that it’s not different when it comes to the management of complex organisations. The same principles apply – when times are complex (and when are they not?) it requires creativity, collaboration and lateral thinking to navigate a large company through the mire ultimately to produce satisfactory outcomes to stakeholders: staff, customers and shareholders alike. And to have its leaders seeing things from different perspectives is paramount to achieving this. Celebrate difference, embrace debate - this is what gives birth to the ideas of the future.

As a country we are trending in the right direction, albeit at snail’s pace, mainly due to the personal crusades of the likes of Elizabeth Broderick, the Sex Discrimination Commissioner, and persistent murmurings about instilling quotas should numbers not improve from their current dismal state. Women now hold 9.5% of board positions, up from 7.1% last year. As I said, inching forward.

We can sit and navel gaze about why Australia is so far behind other Western countries in achieving an element of equality in this area. Or we can just do it. There is no shortage of capable and willing women out there to take up the challenge. Do or die.