The current lack of female Australian CEOs is unlikely to change without tackling current thinking about executive gender diversity and what a CEO is and how a CEO is selected, according to a recent research report.
It found that less than 5 per cent of the ASX top 200 and less than 10 per cent of all CEOs are female – despite women making up 45.9 per cent of the working population.
Unconscious bias plays a major role in executive gender diversity and the selection of CEOs for listed companies, and the research found that organisations that are going to market for a new CEO are more than nine times more likely to select a man when it comes to CEO selection.
“This is due to the ratio of experienced candidates being over nine males to every female and the overplayed use of interviews,” said Julian Tatton, director of HR & executive leadership/consulting firm Mind Group, which conducted the research report.
“While of course it is human nature to want to meet potential candidates, the interview is fundamentally flawed and studies indicate that female candidates are disadvantaged.”
The research explored the perceptions of people around gender diversity and what Australian corporate CEOs looked like, and 97 per cent of people pictured a middle-aged male while 99 per cent pictured the CEO as white.
“This pre-conceived perspective leads to a whole host of cognitive biases (eg confirmation bias) which ultimately favours male (and white) candidates for CEO roles,” said Tatton.
“Without change, it takes an exceptional individual or a savvy politician to negotiate the current ‘system’ to the C-suite”
The business implications of these findings are significant, according to Tatton, who noted that female CEOs are currently performing above the male average in terms of total shareholder returns.
“Organisations will improve performance by actively tapping the female talent pool rather than joining in the ‘war for talent’ over the male pool,” he said.
Meta-analytic studies consistently reveal little difference between the genders in terms of leadership performance, and as such, he said the current level of imbalance is commercially unjustifiable.
Furthermore, given there is a significantly higher percentage of females in HR leadership positions (compared to other more operational functions), he said their broader leadership and career prospects are “either limited or incredible” – depending on whether an organisation makes the right changes.
“Without change, it takes an exceptional individual or a savvy politician to negotiate the current ‘system’ to the C-suite,” he said.
“With change, high potential female leadership talent will have opportunity to grow, develop and flourish.
“This may necessitate talent management that actively facilitates balance through secondments of more women into operational leadership roles.”
3 steps for HR leaders to boost the number of women in CEO roles
Tatton also said there were a number of practical steps HR leaders could take in order to improve executive gender diversity and boost the number of females in corporate CEO roles.
- Build balance into talent management to build the probability of a female CEO being selected. Regardless of gender, it makes good commercial sense, as internal high potential CEO appointments are statistically more likely to last longer and deliver better results.
- Ask questions and look beyond the usual suspects, if there are no female candidates for a position ask “why?” Task those seeking talent with the responsibility of achieving a balanced candidate pool.
- Use success profiles and objective assessment methods (not interviews) to provide a fair and level playing field. Gender balance is a natural output of a valid selection process, the right talent will shine through whilst reducing the risk of a poor selection decision.
For more information see Executive Gender Diversity: Why are there so few female CEOs? Image source: iStock