Diversity

In an article in today’s Australian by the chair of the Australian Institute of Company Directors, Elizabeth Proust, she states

Australia needs more diversity on its boards, not less. Diversity of thought, experience, background, ethnicity and — yes — gender, guard against groupthink and enhance decision-making.

Effective boards must have a breadth and depth of individual experience to interrogate management, oversee strategy, deliver long-term value for the organisation and, most important, challenge each other.

The business case for diversity on boards is irrefutable. Diverse boards and leadership teams lead to better outcomes for stakeholders and for shareholders. Diversity leads to greater innovation, more rigorous questioning and stronger bottom lines.

Well perhaps yes, but more diversity is not always better. Should we have a diversity of age too – representatives from different age cohorts including those in their teens and those in their 90s? Or diversity of IQ? And what if the board is so diverse that it is incoherent?

If we divided the population up into the major categories specified in the ABS Census: age, income, location, gender, sexual preference, ethnicity, religion (and agnosticism / atheism), etc and then selected a board comprised exactly of the proportions of those characteristics would it be axiomatically superior to another board composition? I doubt it.

But I do agree that boards do need diversity of opinion. Sadly that is the one thing that is not diverse – groupthink is a common feature in Australia’s boards. And that’s because they are selected by the club network. You get a board position not because of your skills, experience or quality of thinking. No, you get a board position because you’re a member of the club or you know David Gonski and that you hold similar views to other club members.

There are so many more capable people that could sit on boards but are denied because of the club mentality. A mentality that has condemned Australian boards to consist mainly of superficial clones with no diversity of opinion. And a system that has rewarded the insiders by making it seem their numbers are small and thus bidding up their remuneration. Our boards have been captured by the mediocre. Where are the eccentrics? Where are the philosophers? The geniuses? Certainly not on any Australian corporate or government board.

There are too few directors, on too many boards. A person should only serve on one board  (and I’m not talking here of small NFPs) – it shouldn’t be a portfolio of boards which seems to be attractive to older men and young to middle aged women.

Despite Proust’s list of diverse attributes including diversity of opinion, the AICD is only campaigning on one: diversity of gender.

Catherine Brenner, the former AMP chair, may have been a good investment banker and intelligent. But does anyone for a moment think that a man of the same age and same experience and background would have been appointed as AMP chair?

The most important characteristic of a board member is wisdom. That is something denied to most people, and rare to find in the young. Its chief characteristic is knowing one’s limitations. Boards need far more wisdom.

A board that consisted of wise and ethical people will always be superior to any other board composition. We should be pushing for people who hold to philo-sophia. Minerva should be the guide. Instead mediocrity is the principal attribute of today’s board members.

About Lucius Quinctius Cincinnatus

I'm a retired general who occasionally gets called back to save the republic before returning to my plough.
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26 Responses to Diversity

  1. Percy Porcelain

    The destruction of merit and the advent of the idiocracy.

    Good times.

  2. Bruce of Newcastle

    Australia needs more diversity on its boards, not less. Diversity of thought, experience, background, ethnicity and — yes — gender, guard against groupthink and enhance decision-making.

    LOL.

    After the female chairperson of AMP fell on her sword last week, and was replaced by the safe hands of a very experienced righty old white male, yesterday all three women on AMP’s board resigned in disgrace.

    The corporate ladder for women which levitates them to senior executive roles without the hard yards in operations is almost certainly behind such failures. Without real world experience you get Potemkin directors. That goes for males as well as females – given the popularity of former Labor apparatchiks in corporate boards. We are now seeing the consequences of such SJW activism – lightweights who go *ping* on the SJW brownie points scale just aren’t the people who should be overseeing company behaviour and internal culture.

  3. Terry

    The groupthink of “diversity” to “guard against groupthink”. Wonderful.

    Whenever one suspects that these people just might be actually qualified for the positions they assume, they go ahead an open their mouths.

    Whether it be business, government or academia, “thought leadership” in Australia is at an all-time low, if not completely bankrupt.

    “guard against groupthink”? Groupthink is all we have left.

  4. struth

    Elizabeth is that sort of shitful socialist/marxist big companies use to remain on the right side of an intrusive and corrupt government.
    Without an intrusive and corrupt government, she would never have made it on to any private sector boards at all.
    So she pushes Marxism, and sees diversity in skin colour and sexual genitalia,( like the true racist and sexist she is) as a beneficial business proposition.
    How very, very, unsurprising.
    To fix our business culture, we must get government out of it, and bitches like her can keep her loonie Marxist racism back in the kitchen where she belongs, until they learn to have a good look at the world they are in, study some history, before coming out to take it over.
    These bitches need to be stopped.

  5. mem

    A board that consisted of wise and ethical people will always be superior to any other board composition.

    The importance of holding an ethical and impartial stance is greatly under-rated. Far too many board members are toadies chosen by CEO’s and Government. Hence they are compromised from the beginning. I would also suggest that there needs to an improvement in the performance of auditors and their accountability. It should not just be a counting of numbers against receipts and bottom line. Employees that fiddle the system and directors that play foul will always ensure receipts and bottom lines come out as expected.

  6. duncanm

    But I do agree that boards do need diversity of opinion. Sadly that is the one thing that is not diverse – groupthink is a common feature in Australia’s boards

    exactly.

    Its not just a disease here, it also infects boards in the US.

    Find me one that’s not stacked with accountants and lawyers.

  7. Harry Viderci

    My stepmother was on our company’s board. She was totally incompetent.
    Just one of her actions led directly to two of our employees in South Africa being killed. (She insisted that these two African men be paid the equivalent wages for the same job here in Australia. They were robbed and killed the same day they went back to their township with their newfound wealth. Not understanding culture!)
    Another screw up was engaging with the general manager at the time, to be paid an ‘allowance’ (unknown to the rest of the board), while ignoring the fellow’s diversion of our company’s business to his own company. That’s theft, conversion, fraud, whatever. Both eventually got the sack by the way.
    No, no, do not legislate to ‘fix’ an imaginary problem. Do not saddle leaders with sub par drones, of any sex, culture, or skin colour. Merit only.

  8. RobK

    I would have thought a board should have a complimentary range of talent suited to the particular entity. In many cases a lawyer and accountant can compliment other specialists. All this talk of sex, gender, ethnicity etc is a red-herring. Too often Boards tend to be focused on deal making and the “group think” is that is the definition of enterprise. Focus on the actual business at hand, i.e. customers and product has become secondary. Remuneration has become a brokerage fee for corporate positioning in finance. It stinks.

  9. Des Deskperson

    ‘The business case for diversity on boards is irrefutable. Diverse boards and leadership teams lead to better outcomes for stakeholders and for shareholders. Diversity leads to greater innovation, more rigorous questioning and stronger bottom lines.’

    This line has been flogged in the public sector for about 20 years.

    It’s an example of what I call ‘plausible wishful thinking’. It sounds sensible and logical enough, but I have never seen any hard evidence that it is ever actually true.

  10. Roger.

    A mentality that has condemned Australian boards to consist mainly of superficial clones with no diversity of opinion.

    Donald Horne’s second raters.

    And the last thing they want is diversity of opinion; “diversity” today means tokens who subscribe to cultural Marxism.

  11. Arky

    As soon as women establish as many companies as men and create as much as men, then guess what?
    They will have as many board members as men.
    What’s that you say?
    That means never?
    But I though women could do anything men could?

  12. Without real world experience you get Potemkin directors.

    Bruce of N always nails it. And nearly always without rancour – just critical analysis.

  13. cynical1

    This epidemic of “Diversity” could do with a few different opinions being aired by their ABC.

    Seems to be exempt for some unknown, taxpayer funded reason.

  14. Mother Lode

    I never watched that movie ‘Idiocracy’.

    The name ought to mean something like ‘private/personal rule’.

    I gather the movie wanted to say the future was run by idiots, but I believe the ‘idiocy’ was a what would be a dystopia as imagined by a SJW.

    Ironically, a world where people were able to govern themselves without being harangued, hectored and harassed by SJW’s would be an idiocracy, but that is because idiocracy has no more to to with idiots than a hippopotamus (river horse) has to do with horse racing.

  15. Mother Lode

    Without real world experience you get Potemkin directors.

    I wish they would be more like Eisenstein’s Battleship Potemkin.

    It was a silent movie.

  16. Tel

    There used to be a time when selection of the board had something to do with the shareholders.

  17. Tel

    Despite Proust’s list of diverse attributes including diversity of opinion, the AICD is only campaigning on one: diversity of gender.

    Yup, and anybody can declare themselves to be of any gender, it might even change from day to day.

  18. struth

    The business case for diversity on boards is irrefutable.

    If that was true, it would have already happened without force.

  19. Splatacrobat

    “Has the gender issue in boards reached the point of “zealtory?”
    Yes indubitably.
    Diversity & Inclusion officers are the modern-day equivalent of the Political Commissars during WW2 in the USSR. Only this time they are predominately women (who dominate HR positions) and feminists dedicated to helping other women to the detriment of white men.
    Five years ago you would be hard pressed to find a D&I officer position on employment and recruitment websites, but nowadays it’s the coolest thing to have for companies who want to flaunt their gender equality credentials.
    They are the union delegates to the feminist movement like the shop steward is to the Socialist movement. Embedded, emboldened, and ideologically driven.
    The worst thing you could do would be to let one of these post modern feminists destroy your company with their Rasputin like advice.

  20. W Hogg

    I’m astonished that AMP ended up with not 1 token inexperienced wymminz on the board, but FOUR! They were hopeless, and not even diverse. Just female.

    Fortunately, there’s 4 fewer token wymminz in boards today. If ASIC was rational, they would amend the Corps Act so they’re banned from public company directorships.

  21. Malcolm Thomas

    Promotion based on gender rather than merit is now rife in the public sector, to the extent that, in some agencies, promoting more women reduces not only capability/performance but also diversity, not that that stops them.

  22. H B Bear

    Catherine Brenner, the former AMP chair, may have been a good investment banker and intelligent. But does anyone for a moment think that a man of the same age and same experience and background would have been appointed as AMP chair?

    If they were one of Dave Gonski’s maaaates, quite possibly.

  23. W Hogg

    Seriously, how the fuck is Gonski held in such esteem? Everything he touches turns to shit.

  24. Rockdoctor

    Some of the lower management of mining companies are already suffering for this virtue signalling at the moment as well as the resentment it is starting to cause among males that I am starting to hear openly voiced. Ms Proust is full of it, companies do best best when people are chosen on merit. Watch this space there will be more companies like AMP and everyone will tip toe round the 10 ton gorilla in the room…

  25. Boss Hogg, I can only presume they like the name… 🙂

  26. mh

    The ATO’s diversity program recognises that there is now a majority of women working at the ATO. However, the ATO have highlighted that the APS2 level is where many of them are, and this has to change. The ATO’s diversity program states that the ATO is now working towards getting more women at higher levels, especially Executive level.

    The reason why APS2 level is chock full of women is because they are often entry level positions and part time, which suits many mothers juggling their responsibilities. Instead of recognising the fucking obvious, the ATO throws merit out of the window and starts discriminating against men just to win diversity points.

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