Kelly’s appointment as Westpac’s CEO doesn’t scratch the glass ceiling

Glenda Korporaal

There was a palpable air of excitement at last Friday morning’s press conference at Westpac’s Sydney headquarters to announce St George chief executive officer Gail Kelly as its next CEO.
“There’s hope for us yet,” one woman journalist in the crowd joked before it started.

Westpac CEO David Morgan and chairman Ted Evans were beaming with the selection of a star candidate to fill one of the top jobs in corporate Australia.

Other hard-bitten journalists (myself included) rushed to congratulate the immaculately groomed Kelly, who is set to become one of the very few women to run a Forbes Top 500 company.
When she starts running Westpac next February, Kelly will be closely watched as much for how she handles the job personally as for her strategic plans for the bank.

Kelly was on Channel Nine’s Today Show yesterday morning, with presenter Lisa Wilkinson bashing out a breathless blog about it all, telling how Kelly had attributed a lot of her success to the strong support of her husband.

The fact is that Kelly’s appointment is not so much a sign of the rising number of women in the ranks of corporate Australia as the exception that proves the rule. Despite increasing levels of female participation in the workforce in Australia (women now make up 47 per cent) the number of women in upper ranks of corporate Australia is still pitifully small.

“She’s a rare breed,” says the Business Council of Australia’s chief executive, English-born Katie Lahey. “The fact that you are commenting about a woman who has made it to the top 10 companies in Australia in 2007 says it all.”

“We have been told the story about the flow-on effect of women in the workforce (moving into senior management roles) for the past 20 years and we still haven’t seen any big change.”
Anna McPhee, director of the federal Government’s Equal Opportunity for Women in the Workplace Agency, says a study of the ASX top 200 companies last year showed 3 per cent of CEOs were women. But even that number has since declined.

Kelly’s appointment doesn’t add to their ranks as she was already included because she was running St George. Since the survey was done, three of the six have moved on from their positions — Christine O’Reilly who was running GasNet, Theresa Gattung who stepped down from Telecom New Zealand earlier this year and Kylie Rampa who is no longer running the Macquarie CountryWide Trust.

The one addition to the ranks was the appointment in June this year of Nicole Hollows as managing director of Queensland-based Macarthur Coal. The only other two female CEOs of ASX 200 companies are Macquarie Airports’ Kerrie Mather and retailer Harvey Norman’s Katie Page. Getting to the top of any major listed company is a tough job by any standards.

In fact, as McPhee points out, surveys show the ranks of CEOs of major companies are filled with stay-at-home spouses who no doubt have devoted a considerable amount of time and energy smoothing the path for their upwardly mobile husbands.

But even below those exalted ranks there is not a lot of progress in the promotion of women. The EOWA study shows that women make up 12 per cent of executive management positions in Australia — a smidgen up from 11.4 per cent in the 2004 survey. The survey showed that almost 40 per cent of companies surveyed had no women executive managers.

Most of the women in executive positions were in support positions, as opposed to the line management positions, which are the ones that directly lead to the top. Almost 60 per cent of women executives were in support positions — compared with only 26.7 per cent of the male executives.

Those women who are in senior positions are concentrated in a few industries including retailing and the retail finance sector. “Women remain largely excluded from positions which have significant influence over Australia’s business direction, economy, public policy and the community generally,” McPhee says.

EOWA’s research shows that Australia lags behind other developed countries when it comes to the percentage of women in senior management ranks. The Australian figure of 12 per cent compares with 14.4 per cent in Canada, 16.4 per cent in the US and 16.8 per cent in Kelly’s birthplace, South Africa.

The figures would be even higher in Asia where there is a much greater tradition of women returning to the full-time and near full-time workforce after child birth. One factor behind this is the availability and relatively lower cost of home help.

Back home in South Africa, Kelly would have had access to a relatively cheaper level of domestic workers to help cope with her four children. Britain and Europe have a strong tradition of home help, including a highly developed culture of live-in au pairs, while middle-class women in Asia also have access to relatively cheap home help, often from other low-wage Asian countries such as Indonesia and the Philippines.

In Australia, child care centres can cost more than $100 a day and home help can cost anywhere from $15 to $25 a hour. This can make it uneconomic for women at the lower ranks of the workforce to put in the hours needed to rise up the ranks. Australia’s egalitarian culture counts against working women as well.

Compared with many other countries, there is a broader view in Australia that having paid home help is not quite the right thing to do and certainly not worth paying the extra money for.
The net result is that more time-consuming housework falls on women workers.

On the other side of the equation are the female friendly or family friendly work practices that can help women to stay in the workforce. As McPhee says, it is time out of the workforce or major breaks from the workforce that make it difficult for women to have the necessary professional development needed to advance through the ranks.

Kelly herself said last week that it was the support from some crucial executives in taking a flexible approach to her family situation in her early years of motherhood that helped her to stay in the workforce.

One factor in favour of women workers at the moment in Australia is the labour shortage — a combination of low unemployment, skill shortages and the thinning ranks of locally grown new entrants coming into the workforce — which is finally prompting employers to look at more family-friendly work practices.

Kelly introduced some of these in her 5 1/2 years at St George — including expanding maternity leave, introducing grandparents leave and allowing employees to “buy” extra leave.
Even before the Kelly appointment, Westpac was already seen as one of the more progressive big Australians when it came to encouraging the promotion of senior women.

Like Jackie Robinson’s selection as the first black man to play in the major league of American baseball, Kelly’s success in running one of the world’s top companies will be watched critically here and around the world.

Like that appointment, hopefully it will have a positive demonstration effect that will help transform broader corporate Australia.

By Glenda Korporaal,The Australian, Wednesday 22, August 2007.