The bamboo ceiling is the invisible barrier to professional advancement for Australians with an Asian cultural background and it clearly exists. Statistics in this area on every level from Diversity Council Australia are disappointing. Less than 2% of Asians are in senior leadership positions in ASX200 companies, and less than 4% of Asians are in the boardroom. Anyone who has worked in recruitment knows that there are conscious and unconscious bias towards executive candidates from different cultural backgrounds.
The Strategic Importance of Asia
Asia is one of Australia’s largest trading partners. There would be few businesses that are not touched in some way by the strategic importance of Asia. It represents our largest export market with nearly 60% of all of Australia’s exports going to Asian countries. Nearly 50% of all imports come from Asia. Aussies love to travel to Asian countries, it remains one of the most popular tourist destinations. Investment is increasingly growing from Asia in line with economic growth, stability and development. Quite simply, Asia is very important to our country, we are a part of Asia and today more than 10% of the Australian population is born in Asia, or identifies with an Asian ethnic background.
Diversity Debate Has Been Hijacked
The diversity debate has been focused on gender issues in recent years, but one of our most significant and pressing diversity issues is the very low representation of Asian executives in leadership positions and in the boardroom. We need diversity in our leadership teams and in our boardrooms. We need diversity of thought, diversity in perspectives and cultures. We need to become more innovative and this in turn will lead to higher levels of business growth. We need skill diversity, we need gender diversity, we need age diversity.
Pragmatic Change Required
In order to achieve change in these areas, I think the simplest and most pragmatic way to address these issues, at least in the boardroom, is to apply two key criteria to each search assignment. Firstly, at the heart of the recruitment process there needs to be a skills-based board search. Boards need to be assessed against a skills matrix and gaps need to be addressed. Just by applying this discipline in many instances you will address diversity issues, but if that is not achieved then a diversity criteria needs to be applied. We need to shake-up the board search process and put a greater emphasis on bringing in a fresh dynamic talent pool that is more reflective of the businesses that our boards represent. Companies with diverse boards enjoy significantly higher earnings and returns on equity; the pursuit of change in this area is very worthwhile. It makes good business sense.
We Need Ladders Not Ceilings
We need ladders, not ceilings; but to effect change there needs to be a willingness to accept that the current way of searching for board members is not working. I believe we need more Asian’s represented in business, in parliament and in the boardroom if we are to do business successfully in the region. All current studies point to Asian talent being under-leveraged, that there is cultural bias and stereotyping. Women from Asian backgrounds are being even more disadvantaged.
Business leaders need to be able to start a sensible conversation around this topic without fear of labels such as race discrimination, because clearly there are a range of issues facing our boardrooms. Asian diversity is just one of these issues. We need to give real thought to how we implement better ways to select board members, create high performing boards and expand the board talent pool to address skills and diversity. I believe with a fresh approach towards board candidate selection, we can institute a significant change in the makeup of Australian boards to better represent the business, consumers, shareholders and the key stakeholders of each business.
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