Stagnating or slipping backwards on gender parity: Latest CEW Senior Executive Census urges a shift in approach

5 minute read 07.09.2022 Kate Hilder, Siobhan Doherty

Our key takeaways from the CEW Senior Executive Census 2022

Key takeouts

The report found that women remain underrepresented in executive roles across the ASX 300, and in the leadership pipeline, with representation actually slipping backwards or stagnating

A key message running through the report is that without intentional and concerted action, including setting gender balance targets, change will remain incremental at best (or possibly even slide backwards) and that this represents a missed opportunity for organisations, for the economy and for the community.

The report (re)frames gender parity in leadership as an untapped opportunity, rather than a risk. CEW President Sam Mostyn comments: 'The ‘risk’ [for organisations] is not to be found in appointing women [to leadership roles]; the risk is in not appointing the skilled, capable women who are ready to step into leadership roles and whose presence would drive better outcomes'.

Now in its sixth year, the Chief Executive Women (CEW) Senior Executive Census 2022 tracks progress towards gender balance (ie 40% women, 40% men and 20% open) in the executive leadership teams of ASX 300 companies.

The headline finding is that despite evidence of the benefits of diverse leadership and despite increased investor focus on the issue, ASX 300 companies are 'going backwards' when it comes to representation of women in leadership roles - according to the report, we are 100 years away from reaching gender parity in CEO positions.

A (missed) opportunity

A key message running through the report is that failure to embrace, support and promote gender diverse leadership is a missed opportunity for organisations – especially in the current environment.

CEW President (and Chair of the government's Women's Economic Equality Taskforce) Sam Mostyn comments:

'The appointment of women into top leadership roles has anecdotally been seen as ‘risky’. The ‘risk’ is not to be found in appointing women; the risk is in not appointing the skilled, capable women who are ready to step into leadership roles and whose presence would drive better outcomes'.

Similarly, Governance Institute Chair and Chair of the CEW Policy and Engagement Committee Pauline Vamos challenges companies to embrace the opportunity that gender parity in leadership offers.

'This year, Australia has a choice. We can continue to hope for incremental change in the progress of women into leadership; or we can be bold, set targets, be accountable and truly harness one of our greatest opportunities for success.
In a globalised, competitive world, companies have a distinct choice – investing in equality and taking action or accepting underperformance. To do any less is to squander a remarkable opportunity. CEW’s call to action is - embrace the opportunity that gender equality offers us'.

Key Findings

Going backwards…

The report highlights that representation of women in leadership roles slipped backwards in 2022. For example, the report found that:

More ASX300 companies have no women in their executive leadership teams than this time last year (16% in 2022 vs 15% in 2021)
Fewer ASX300 companies have gender balanced executive leadership teams (50 down from 58 in 2021).

Stagnating: Women remain underrepresented in top roles

The report also found that women remain underrepresented in CEO roles. According to the report:

only four for the 28 CEO appointments at ASX 300 companies in 2022 were women
the total number of female ASX 300 CEOs is unchanged from last year at 18

The report projects that it will take 100 years for corporate Australia to achieve gender balance of at least 40% women in ASX 300 CEO positions.

Unlikely that this will change in the near term (without a shift in approach)

The report found that women remain underrepresented in the CEO pipeline ie the management roles with profit and loss responsibility (line roles) which are the 'traditional pathway' for CEO appointments' - 82% of ASX 300 CEOs in 2022 were appointed from line roles.

According to the report in 2022:

women hold 15% of ASX 300 line roles (up 1% on last year, and just 3% since 2017). This slight uptick from 12% in 2020 to 15% in 2022 is attributed to an increase in the number of women appointed in Group Executive and COO roles.
49% of ASX100 companies and 61% of ASX300 companies have no women in line roles
the report projects that gender parity (40:40:20) in line management roles in 36 years away.

The report points to the drop in the number of women holding ASX 300 CFO positions - from 52 in 2021 to 45 in 2022 – as a particular concern, given that the CFO role is the only 'functional role that provides a recognised pathway to CEO' roles'.

Targets work: Why the CEW considers all companies should have gender balance targets in place

The report found that companies that set gender balance targets are almost three times as likely to achieve gender balanced leadership teams than companies that do not do so.

Importantly, the also report highlights that the companies that achieved gender balance in 2021 but did not maintain this it either: a) set targets that were less than 40:40; or b) did not set targets at all.

Looking more closely, the report identifies a correlation between ASX ranking, targets and gender balance, with larger companies more likely to have set targets, and more likely to have higher levels of female representation. According to the report:

The proportion of companies that have set 40:40 or better targets is significantly higher in the ASX100 (51%) compared to the ASX300 average (36%)
The proportion of women holding leadership roles in ASX 100 companies is significantly higher than in other companies. For example, the report found that:
- the proportion of women in executive roles increases from 27% in ASX 300 companies, to 28% in ASX 200 companies to 30% in ASX 100 companies.
- the percentage of line roles held by women is again highest (17%) in ASX 100 companies, dropping to 15% in ASX 300 companies.
- women hold 24% of ASX 100 CFO roles vs just 12% in ASX 201-300 companies
Of companies with 40%(+) gender targets in place, 35% have achieved gender balance (+1% from 2021).

Based on the report findings, the CEW considers gender targets to be one of the most effective mechanisms to drive progress towards gender balance commenting that:

'The case for gender balanced targets is clear and all companies should be implementing this solution'.

Actions for companies: A 'checklist for success'

In addition to setting gender targets for leadership teams and line roles, the report includes a suggested 'checklist' of suggested actions companies can take (together with links to various resources) that are known to accelerate progress. These include (among other things): implementing the Respect@work recommendations for business, embedding 'equitable flexibility for all genders' and investing in the future female leadership pipeline.

The report also calls on investors and government to support progress.

Investors are encouraged to (among other things), exert their influence to push companies to set timebound gender parity targets and to use proxy voting to encourage boards to holds companies accountable for meeting the targets set and advocate for greater disclosure.
Governments are encouraged to (among other things): a) deliver universal early childcare/education; b) expand the commonwealth paid parental leave scheme to all parents; c) prioritise organisations with gender balanced leadership in government procurement processes; and d) strengthen corporate reporting requirements.