ASX 200 Neglecting Asian Talent - Report
30 October 2013 at 8:48 am
People from Asian backgrounds are dramatically underrepresented among Australia’s corporate chiefs despite the region’s growing importance in the nation's business activity, a new study suggests.
The Diversity Council Australia (DCA) has released Capitalising on Culture: A Study of the Cultural Origins of ASX 200 Business Leaders, which shows that while those with Asian backgrounds makeup 9.6 per cent of the broader Australian community, they comprise only 1.9 per cent of executive managers and 4.15 per cent of directors.
The project was a partnership research initiative between DCA, the Federal Government’s Australian Multicultural Council, and PwC Australia, the Australian Government and IBM Australia.
The study, which revealed the cultural origins of board members and senior executives in major listed Australian listed companies, found that overall 21.9 per cent of ASX200 chief executives were “culturally diverse”, compared to 32.3 per cent in the broader Australian community.
“Culturally diverse” referred to people from non-Anglo-Celtic cultural origins, including those from European, Asian, African, Middle Eastern and Pacific Islander origins.
Australia’s leading businessmen and women were mainly English, Scottish, Irish, German and Welsh, with the number of “culturally diverse” business leaders dropping by at least half when North Western Europeans were excluded, with 10.9 per cent of leaders from those origins.
“For many years we have known the degree of gender diversity on ASX 200 boards but we haven’t had any knowledge of the cultural background of directors. Yet a culturally diverse and capable leadership team can provide enormous benefits for organisations, such as the potential to boost local market share, enter international markets, create strategic alliances, maximise innovation and meet critical talent shortages,” Diversity Council Australia CEO Nareen Young said.
Andrew Stevens, Managing Director of IBM Australia and New Zealand, said cultural diversity was a key factor for his organization going forward.
“Now more than ever it is important to capitalise on the full breadth of talent in the marketplace,” he said. “A culturally diverse workforce, at all levels from graduate hires through to executives, fosters creativity and innovation which is essential to any company’s ongoing success.”
Late last year the Federal Government listed increasing the number of “Asia-capable” directors on the boards of ASX200 companies as a “national objective” in its White Paper Australia in the Asian Century.
This included the goal that by 2025 one-third of board members of ASX 200 companies would have “deep experience in and knowledge of Asia”.
The Capitalising on Culture report suggested ASX 200 companies could better use talent originating from Australia’s more recent waves of migration, such as leaders originating from Southern and Eastern Europe and Asia.
“A culturally diverse leadership team can assist their organisation to identify and enter new global markets,” it said.
“In today’s ‘Asian Century’, the emerging and rapidly growing economies of east and south Asia offer Australian organisations significant business opportunities. Three of Australia’s five largest trading partners – China, Japan and the Republic of Korea – are in Asia and currently more than three-quarters of Australia’s exports go to Asia.”
The Diversity Council has specified a point of “critical mass” for companies to aspire to – a point where cultural diversity becomes the norm.
This is achieved when 28 per cent of an organisation’s leaders are culturally diverse.
Currently, one in three ASX200 companies achieves this benchmark.
Read the full report here.