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05 August, 2009

GREATER HARMONY - BIGGER PROFITS What women bring to the boardroom

Not so long ago women entered Australia’s stuffy boardrooms simply to bring tea and biscuits for their pinstriped male superiors.   Now businesses with women at the helm are outperforming those run by men alone.

Despite this, women directors are still very much in the minority despite having demonstrated an ability to bring harmony and improved profitability to the organisations they serve.

According to the Australian Bureau of Statistics' report A Picture of the Nation, released in January 2009, 28% of Generation X and Y women held a bachelor's degree, or higher in 2006, compared with only 21% of men.  (The ABS defines Generation X and Y as aged between 20 and 39; almost 30% of the population).

This poses the question why 54% of Australia's top 200 publicly listed companies do not have a single woman in executive management positions, according to the Equal Opportunity for Women in the Workplace Agency. 

And, even in one of the more gender-balanced financial institutions, a breakdown of salaries showed that, out of 1500 staff, only 1.9% of women earned more than $150,000.

Companies which have women as top-level directors have delivered average returns of nearly 14% over the past two years. Those run solely by men mustered an average of 10%, according to a Cranfield School of Management (UK) study.

Corporate performance also appears to improve significantly the more women that hold positions of influence and power.  These finding are based on "returns on equity"; a measure of efficiency and profitability. 

Dr Val Singh, the study’s co-author, said companies employing women as directors were better run than those sticking to their "Old Boys" network because women bring wider opinions and experience to the decision-making table.

"A diverse board can generate a richness and quality of ideas that is lacking in an all-male board that is locked into the same mindset," Dr Singh said. "The result is often a better managed company, making more informed decisions, with greater understanding of the needs of its customers and workforce”.

“Companies with a diverse senior team take their decisions from a wider viewpoint. Women are a powerful force as consumers and as employees.  Having their voices heard at the top makes a difference."

Women managers reported taking longer than men to make decisions because they tried to build consensus. Fellow managers and directors reported less aggression at meetings when women were present.

"You tend to get less ranting and raving, less thumping of the desk, less screaming and shouting.  That sort of behaviour is just not tolerated," said a manager in a financial institution.

But the view that women managers are more nurturing, people-oriented and consultative runs contrary to the experience of many workers who have suffered under tyrannical female bosses.  It also runs counter to other research.

A study by Judy Wajcman, professor of sociology at the Australian National University, concluded there is no such thing as a "female management" style.

“Women executives are just as committed to their careers, work just as long hours, spend just as many days away from home each month and are spurred to success by similar desires as men”, her study said.  She also found "both men and women feel the need to conform to the male stereotype of management because it is still, in practice, the only one regarded as effective".

Even Dr Anne Ross-Smith, head of the school of management at UTS and co-author of the new study, found when she covered similar territory for her PhD in the mid-1990s, women executives believed they had no influence on management culture.

“But the crucial difference between then and now is not just the times are gentler.
Having a critical mass of women in key decision-making roles - rather than the token woman - seems to be what counts," she said.

Managers in these more woman-friendly organisations, a minority of Australia's workplaces, the researchers emphasise, report that gender is less of an issue than in the past.

From their diverse experiences as consumers, decision-makers and users women directors are often able to bring new perspectives to the boardroom.  They offer greater variety of thinking and personality traits.  On the other hand, male managers tend to be decision-making types with similar thinking attributes.

Women also offer different ethical, communicative and environmental values and a preference for a more androgynous leadership style.  Full appreciation of this different voice offered by women directors still seems a long way off in almost half of the top 100 companies.

"Think director … think male" is likely to persist for some years yet.