“Be Bold for Change” - Speech by MCA Chair Vanessa Guthrie
Women in Resources and Energy
International Women’s Day,
Wednesday 8 March 2017
Australian Embassy, Tokyo
As highly developed and mature economies, Australia and Japan share a great deal of common ground. We are significant trading partners and enjoy a strong bilateral relationship, and our resources and energy sector has been one of the key driving forces of our economic relationship for over 50 years.
But against this backdrop, in both our countries, our economies have been held back by a stark under- representation of women in government, business and academia and therefore less than full participation of women in our economies. During 2016, the World Economic Forum published their 10th Global Gender Gap Report, which highlighted that at the current rate of change, globally we will take 170 years to achieve gender parity. That is almost two centuries…..
This statistic is not driven by those nations with small economies and low GDP – both Australia (at number 46) and Japan (at number 111) rank well behind the top four leading nations of Iceland, Finland, Norway and Sweden.
Women make up more than half the population of the world yet have long been overlooked as a vital talent pool that contributes to economic growth and prosperity. While women enjoy strong representation in health and education outcomes in both Australia and Japan, the areas of greatest underperformance relative to the global leaders are in economic participation and opportunity, and political participation. Clearly, we both have some work to do.
So what is holding us back?
The business case
Today I will focus closely on one of these dimensions…. economic participation.
The business case for equal gender participation in our economy is compelling. Of the many studies that have been undertaken, the findings of three are stark – two longtitudinal studies that were undertaken by Credit Suisse and McKinsey & Co in Europe and North America over a period of some 10-15 years, and the 2016 study by Petersen Institute for International Economics and Ernst Young.
These studies indicate that companies which have women on boards and in senior executive and leadership positions outperform their counterparts on almost every financial performance measure. Credit Suisse found that these companies have on average 16% higher return on equity, and more than 4% higher growth. Even more stark, McKinsey found a 53% higher return on equity and 14% higher EBIT margins. The Petersen Institute/Ernst Young study of more than 22,000 companies across all sectors found that an organisation with 30% female leaders could add up to 6 percentage points to its net margin.
It is difficult to argue that any company would choose to not pursue such impressive gains in business performance, or that any government would not want such improvement in economic growth. So why is it taking so long for us to achieve gender parity in our economies? And how can we change our rate of progress?
We will come back to this question, but firstly let’s take a look at how the Australian resources sector performs on the gender parity scale.
The Australian resources and energy sector
The Australian resources sector is a significant contributor to the Australian economy as well as a major employer. Our most recent economic data indicates that we contribute 7% of GDP, directly employ 225,000 people and we accounted for over 50% of Australia’s export earnings in 2016. Our industry sector was the largest contributor to GDP growth over the past decade.
However the participation of women in this growth has remained stubbornly stagnant. Around 1 in 6 employees in our workforce are women, with the major fluctuations due to commodity cycles being seen in the male workforce.
Female workforce participation in the resources sector oscillates in the range 12 – 18 %, with the 10 year average being 14 %.
From a gender composition perspective, resources ranks last behind all other industries in Australia at just 15.8%. These numbers are even worse when you look at the number of women in leadership roles where just 2.6% of CEOs in our sector are women.
Clearly, if we are to gain the benefits that increased female participation in our economy will deliver, we need to change our current approach. Understanding the barriers to involvement, and executing a robust and well thought-out plan to shift our performance is key.
There are multiple barriers to increased female participation in the resources sector workforce which are interconnected and multi-layered. They start with structural and policy barriers such as having flexible work design so that all employees can blend their family responsibilities with their career; and the challenge of pay equity for men and women.
These barriers are the easiest to shift, as with strong leadership and commitment to achieving gender equity, the policy and structural workplace changes can be delivered.
Within the resources sector, significant progress has been made in these areas. Programs including job- sharing between part-time employees are gaining traction – such as at BHP Billiton with two team managers sharing their role at their remote Pilbara operations.
Changing work rosters to accommodate more flexible work hours has also been highly successful. For example, at Newmont’s Boddington mine, the truck fleet is operated by women on shifts that match the local school hours which allows them to blend their work and family responsibilities effectively. Men at the mine are also taking up this opportunity to spend more time with their families.
The gender pay gap is most significant in the Australian resources sector, with a differential of some 17% between men and women. Recognising this pay gap at Shell Australia has resulted in a direct, concerted effort to close that gap. Today, after significant effort in identifying pay inequity and taking action to close the gap, Shell have achieved pay parity for men and women – a stark reminder of what can be achieved with focus and commitment.
Women are also less likely to enter our industry as it is perceived to be “unfriendly” and unattractive to women – from the type of work to the shift rosters to the ‘culture’.
This can be attributed to the lack of role models with which women can identify, a lack of networks among women in the industry and a lack of sponsorship of women for promotion into leadership.
To address this, the MCA supports programs to promote careers in the resources sector with young women in schools. Examples include Robogals, which is an international not-for-profit, student run organisation that aims to increase female participation in science, technology and engineering; and TechTrails which provides hands-on experience for school girls in engineering, science, maths and technology projects to encourage future careers in our industry. The MCA has also produced the video “Walk the Mining Road” showcasing the careers of women in our industry as role models for young women.
The MCA has a number of initiatives underway that target closing the gender gap. Scholarships are provided in partnership with companies to encourage women to study further in engineering as well as increase their knowledge of business and governance. Awards have been established that recognise the outstanding performance of women in our sector – including women in trades, in executive roles, as champions of other women and as role models. And networks that encourage women to connect with other women in our industry have also been initiated.
All of these initiatives are strongly supported by our industry leaders – and they recognise that while these initiatives are helpful, there is still more work to do in their workplaces. That is why some leaders – such as Andrew Mackenzie of BHP Billiton – have established bold, ambitious targets to change the gender diversity of their workforce. BHP Billiton have set a 50:50 gender target for their workforce by 2025 – a true stretch target from their baseline of 17% today. This has been mirrored in Fortescue Metals Group which in 2016 achieved a 50:50 gender balance in their board – one of the first Australian companies to do so.
It is leadership such as this that is challenging the cultural norms and expectations to achieve true gender equity in our industry and deliver improved innovation, productivity and economic outcomes.
Clearly however, even with these initiatives in place, we are not making the overall progress we would like in the Australian resources industry. Our female participation statistics remain stubbornly low. We are now challenged to change our attitudes, behaviours and culture: such as the need to remove unconscious bias in recruitment and promotion, and to promote balance of work/life priorities for both men and women.
So on this, International Women’s Day, our industry is committed to the theme “Be Bold for Change”. Our industry leaders understand that we need to do more than express an intention to change ….. we need to be bold and create the change that delivers a stronger industry.
The clear message from the World Economic Forum is that leaders from business, government, academia and our communities are crucial to improving our current performance. Cultural change starts with leadership.
We need a sense of ‘chronic unease’ about our current performance. The four ways we as leaders can be bold and act to increase women’s participation in the economy are:
- Measurement: we need to measure the gaps in our performance to identify what needs to be done, then make those changes and measure the results. One clear change can be the introduction of targets for female participation. The Australian Stock Exchange is leading the way in this by setting a target of 30% women on all ASX 100 boards by 2018.
- Sponsor, mentor, advocate: both women, but more importantly men, as leaders have a responsibility to identify talent, sponsor women into networks so they can reach their full potential; and advocate for change to the culture of organisations so that women are regarded as equal contributors;
- Remove unconscious bias: removing the unconscious biases that impact on how we determine merit and potential in all forms of recruitment, retention and promotion will increase diversity. Understanding that men and women are often promoted differentially and acting to change that challenges our own biases in building strong, diverse teams. And we know that increased diversity increases innovation, creative thinking and rapid problem solving which leads to improved productivity.
- Recognise men too: making structural, policy and cultural changes to the workplace that can benefit men as well is critical to enable them to also achieve a more sustainable work-life balance.
I would like to believe that by “Being Bold for Change” in 2017 we will create a better path for our children – particularly our daughters – to follow.
Australia’s world-class resources sector is working hard to do just that.