Lost in the details of the great schism in the Fairfax boardroom is the news that after the annual general meeting next month, there will be no women on the board. Long-serving director Julia King is stepping down, and instead of replacing her, Fairfax has decided to shrink the number of board positions from nine to eight.
The real question for the Fairfax shareholders is not “should there be one or more women on the board?” but “does the board look like the community it serves?” In other words, does it look like its shareholders, customers and employees?
It’s almost impossible to know the gender breakdown of the shareholders, but one could probably assume that due to compulsory superannuation, it’s probably close to 50/50.
As for the readership of Fairfax’s main publications, The Sydney Morning Herald, The Age and The Australian Financial Review; according to figures on the company’s website, the Monday-to-Friday SMH is 56/44 male/female, Saturday edition 53/47 and Sun-Herald 52/48.
In Melbourne, the Monday-to-Friday Age is 54/46, with the Saturday edition exactly half/half and and Sunday Age slightly more male. The paper with the highest proportion of male readers is, of course, the Fin Revie , with the Monday-to-Friday edition at 75/25 and the weekend edition, 67/33.
The jewel in Fairfax’s crown, The Good Weekend magazine, which brings in millions of dollars in advertising every year, has slightly more female readers, or 48/52 male/female.
The top advertisers in these publications are the state and federal governments, large retailers such as David Jones and Myer and car companies such as Toyota. Are they interested only in male readers? I don’t want to frighten Mark McInnes (CEO of David Jones), but my husband would enter a department store only at gunpoint. He buys bike gear, music and wine on-line, and I buy everything else.
Fairfax has other assets, of course, but these are the most high-profile and long-standing of the company’s media properties. As for the employees — that’s probably about 50/50, with more men at the top.
So it’s a company that has large numbers of female shareholders, sells products to women and employs women. So, after November 10, why will all the board directors be male?
A company spokesman this week said that the company was considering the issue and was thinking of appointing a new director some time next year. But several people have told me that King has been telling all and sundry for five years that she intended to retire in 2009, so it can hardly have come as a surprise.
Appointing a woman to the board doesn’t just give you a warm inner glow. In 2007, a landmark study came out showing that gender imbalance does affect profitability. Employment consultant Catalyst’s report “The Bottom Line: Corporate Performance and Women’s Representation on Boards” reported that, over a four-year period, those Fortune 500 companies with the highest proportion of women on their boards did significantly better on three crucial financial measures.
These were return on equity, return on sales and return on investment. All these ratios have a direct effect on the share price.
High-profile board director David Gonski has long been an advocate of board diversity. Some time ago he told me, “I can probably get very similar views from people of my age and background. But if you have people looking at things slightly differently, then that is good for a debate.”
It has been already reported in Crikey that the 70-year-old outgoing chairman, Ron Walker, only reads his emails when they have been printed out by his secretary; going by the ages of the other directors, he would not be alone. Although Fairfax does not print the ages of its directors in the annual report, it’s fair to say that, aside from Nicholas Fairfax, they are of mature years, and prima facie less likely to understand the new technologies that are transforming the media sector.
So any new Fairfax director will have to fill several gaps in the board’s collective qualifications and expertise. She will need broad shoulders.
If we are going to ignore what shareholders think (i.e. impose quotas), and ignore the actual ability of the board members, why stop at women?
The makeup of the board should be directly related to the gender and ethnicity of readers. For example, at least 1/2 the board should be women, and there should be a compulsory ethnic breakdown of the board linked to the latest ABS figures / and current Fairfax subscriptions.
And this should apply to everything! In politics, for example, we should ignore what voters want, and instead always have co-prime ministers (male and female). One could be voted in, and First Dog could pick the other! Or even better, we could require a specific gender and ethnic split for government ministers. Forget about voting (for goodness sake, sometimes people elect Liberal governments!).
Or. And call me crazy. We could select boards based on ability rather than colour or creed.
Wholeheartedly agree. Regarding the age of board members:
http://investing.businessweek.com/research/stocks/people/board.asp?ric=FXJ.AX
If board members were selected by ability women would be half the members, unless of course one believes that ability comes with a penis. If members were selected by ability and expertise then probably a lower proportion of women would be board members because there are prolly a lower proportion of women with media business expertise (for reasons not related to ability, but that’s another issue). If board members were selected by ability, expertise and experience then even fewer would be appointed cos so few women have had senior media business experience. If board members were selected by ability, expertise, experience and reputation . . . .
Women were 44% of superanuation fund members in October 2005 according to the Association of Superannuation Funds of Australia. That seems intuitively right cos women have a lower participation in the paid workforce than men.