What’s the Dif­fer­ence?


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Why a mono­cul­tural lead­er­ship team is bad for busi­ness

De­pend­ing on the busi­ness set­ting, Ming Long can dial up her Aus­tralian ac­cent or play it down. The non-ex­ec­u­tive di­rec­tor of Char­tered Ac­coun­tants Aus­tralia and New Zealand and for­mer fund man­ager of the $2.5 bil­lion In­vesta Of­fice Fund has found it to be an ad­van­tage in her ca­reer. “In busi­ness, they’ve al­ready seen my face when I first open my mouth,” she says. “Then they hear I’m Aus­tralian and they think, ‘What do I do with that?’ You can see it in their faces. I use Aus­tralian hu­mour to help them.” When she’s in an Asian set­ting, she switches how she talks. “If I speak like an Aus­tralian, they won’t en­gage be­cause I’m dif­fer­ent.”

Like an in­creas­ing pro­por­tion of Aus­tralia’s pop­u­la­tion, Long was born in Asia but has spent most of her life here. “But cor­po­rate Aus­tralia still sees eth­nic­ity plus be­ing a woman as a dou­ble whammy,” she says. “It should be a strength.” To Long, Asian Aus­tralians “are the very peo­ple who are go­ing to build a bridge into Asia so we will be more suc­cess­ful”.

IT AP­PEARS THOSE MAK­ING DE­CI­SIONS ABOUT LEAD­ERS... DON’T VALUE DIF­FER­ENCE. THEY SEE ASIANS AS IN­FE­RIOR, NOT AM­BI­TIOUS. Ming Long, non-ex­ec­u­tive di­rec­tor of Char­tered Ac­coun­tants Aus­tralia and New Zealand and for­mer fund man­ager of In­vesta Of­fice Fund

Given the lat­est Aus­tralian cen­sus data re­veals that nearly half of Aus­tralia’s pop­u­la­tion was born over­seas or had a par­ent born over­seas, Long’s mis­sion to dis­man­tle the “bam­boo ceil­ing” and see more cul­tural di­ver­sity in busi­ness is timely.

Spend 10 min­utes in the foyer of a pro­fes­sional ser­vices firm or on a cam­pus in Aus­tralia and the cul­tural mix is ob­vi­ous. But look to the group at the top of our or­gan­i­sa­tions and the pic­ture is jar­ringly dif­fer­ent. In cor­po­rate Aus­tralia, the ranks of se­nior lead­ers re­main over­whelm­ingly dom­i­nated by those of An­glo-Celtic and Euro­pean back­grounds, ac­cord­ing to Race Dis­crim­i­na­tion Com­mis­sioner Tim Sout­phom­masane. In 2015, he formed a work­ing group con­sist­ing of the Aus­tralian Hu­man Rights Com­mis­sion, the West­pac Group, PwC Aus­tralia, The Univer­sity of Sydney Busi­ness School and Tel­stra to au­thor Lead­ing for Change: A Blue­print for Cul­tural Di­ver­sity and In­clu­sive Lead­er­ship.

The statis­tics are star­tling. While 32 per cent of the Aus­tralian pop­u­la­tion has a back­ground other than An­glo-Celtic, the num­ber in lead­er­ship is minute. In ASX 200 com­pa­nies, 77 per cent of CEOs have an An­glo-Celtic back­ground and 18 per cent have a Euro­pean back­ground, while just five per cent – that’s 10 peo­ple – have a non-Euro­pean back­ground.

At board level there’s even more con­form­ity: 18.8 per cent of ASX 300 di­rec­tors have a non-Aus­tralian back­ground, ac­cord­ing to Water­mark Search In­ter­na­tional’s 2016 Board Di­ver­sity In­dex.

Look­ing at fe­male lead­ers in ASX com­pa­nies, there’s even less di­ver­sity. While the num­ber of women in se­nior ranks is slowly in­creas­ing, there’s a strong bias to­wards those with an An­gloCeltic back­ground. Ac­cord­ing to Di­ver­sity Coun­cil Aus­tralia re­search re­leased this year, in 2015 there were just 15 cul­tur­ally di­verse women out of 1482 CEOs (male and fe­male), 44 out of 2327 se­nior ex­ec­u­tives, 188 out of 7491 di­rec­tors and 55 out of 1350 CFOs.

It’s one thing to claim that Aus­tralia is a suc­cess­ful mul­ti­cul­tural so­ci­ety, says Sout­phom­masane, but it’s not re­flected in the cor­ri­dors of power. Although the top-per­form­ing stu­dents in Aus­tralian schools and higher ed­u­ca­tion in­sti­tu­tions are from di­verse back­grounds, he adds, they are con­spic­u­ously miss­ing from the se­nior ranks of busi­ness. “Where are all th­ese bril­liant peo­ple go­ing? Does the tal­ent dis­ap­pear? Do they lapse into medi­ocrity?” he asks. “There’s a cer­tain idea about what lead­er­ship in Aus­tralian or­gan­i­sa­tions must look and sound like; it’s not re­flect­ing cul­tural di­ver­sity and there are not a lot of role mod­els from nonEuro­pean back­grounds.”

Far from dis­ap­pear­ing, many tal­ented Aus­tralians are head­ing offshore, as APN Out­door non-ex­ec­u­tive di­rec­tor and for­mer Mad­docks and Blake Daw­son part­ner Lisa Chung notes with dis­may. “They’re go­ing to Sin­ga­pore or Hong Kong, where they feel more at home. It’s just a ridicu­lous waste. We’re in­vest­ing, they are con­tribut­ing and it’s a wasted op­por­tu­nity.”

TThere’s a strong busi­ness case for more cul­tural di­ver­sity in lead­er­ship, says Jesse E. Olsen, a se­nior re­search fel­low at The Univer­sity of Mel­bourne’s Cen­tre for Work­place Lead­er­ship. It’s about cre­ativ­ity and adapt­abil­ity but there’s a more su­per­fi­cial ad­van­tage as well, he says: if your cus­tomers and clients look a cer­tain way, your em­ploy­ees should look like them, too. In a study re­leased last year, Lead­er­ship at Work: Do

Aus­tralian Lead­ers Have What It Takes?, Olsen and his col­leagues found that only 4.7 per cent of all pri­vate­sec­tor work­place lead­ers (gen­eral man­agers) are born in Asian and Mid­dle East­ern coun­tries and 75 per cent of se­nior lead­ers (CEOs and di­rec­tors) are Aus­tralian-born. More than two-thirds of over­seas-born se­nior lead­ers op­er­at­ing in Aus­tralia in for­eign-owned or­gan­i­sa­tions are from English-speak­ing coun­tries. He sug­gests there’s an in-group and out-group dy­namic. “‘Do we let them into the group that has tra­di­tion­ally been white men?’ I think I can say there hasn’t been as much change as there should have been.”

Cul­tural stereo­typ­ing plays a role, too, says Long. “It ap­pears those mak­ing de­ci­sions about lead­ers in an or­gan­i­sa­tion don’t value dif­fer­ence. They see Asians as in­fe­rior, not am­bi­tious, too quiet, sub­mis­sive and the style too col­lec­tive-fo­cused com­pared with the Western lead­er­ship model.” That is not only un­fair but also a busi­ness risk, she adds. “Un­cer­tainty about how to bring the best out of peo­ple who are dif­fer­ent to them is in­her­ently lim­it­ing their or­gan­i­sa­tion’s abil­ity to deal with in­creas­ingly volatile and dis­rup­tive eco­nomic en­vi­ron­ments.”

Like Long, most of the small co­hort of busi­ness lead­ers from non-Cau­casian back­grounds face reg­u­lar re­minders that they are judged dif­fer­ently from their peers. Vik Bansal, CEO of ASX com­pany Clean­away Waste Man­age­ment, re­calls be­ing told, “You have to be 20 per cent bet­ter be­cause you start off be­hind.’’ (See “Di­verse think­ing” on page 122.) He’s been re­luc­tant to talk about di­ver­sity but feels it’s now time for a more open dis­cus­sion.“Nor­mally,Iavoid­hav­ingth­esec­on­ver­sa­tions be­cause they can ap­pear self-serv­ing,” he says. “Aus­tralia is not as ad­vanced as the United States on this.”

As many Aus­tralian or­gan­i­sa­tions are do­ing busi­ness around the re­gion, it makes a good com­mer­cial case to im­prove the mix, he adds. Re­cently, he put his lead­er­ship team through cul­tural bias train­ing. “They loved it be­cause they all have chil­dren who bring home friends for sleep­overs. It’s hap­pen­ing around us, in schools and unis, so why not bring that to the of­fice?”


For Miriam Silva – who at­tends many busi­ness func­tions in her role as pres­i­dent of the Com­mit­tee for Eco­nomic De­vel­op­ment of Aus­tralia’s State Ad­vi­sory Coun­cil in South Aus­tralia and the North­ern Ter­ri­tory – there have been star­tled re­ac­tions when she joins a ta­ble of se­nior lead­ers. “I’m of­ten sit­ting next to a CEO and you can see [the CEO] is think­ing, ‘Why am I sit­ting next to this small woman in a scarf?’ But half­way through the lunch, they ask me to speak to their em­ploy­ees.” She also points out that dur­ing her ca­reer at ANZ Banking Group, she had cru­cial sup­port from for­mer CEOs John McFar­lane and Mike Smith and ex­ec­u­tive Brian Hartzer (now CEO of West­pac), who recog­nised that lead­er­ship is where you find it, re­gard­less of what a per­son looks like.

While Chung hasn’t faced much overt bias, she has lost count of the num­ber of crowded busi­ness lunches where there were vir­tu­ally no other Asian faces in the room. “At the Na­tional Press Club lunch af­ter the Bud­get a few years ago, there were just two – Penny Wong and me,” she says. When she points this out to col­leagues, the usual re­sponse is, “I hadn’t no­ticed.’’ That’s part of the prob­lem, ex­plains Chung. “I’d like to see [the Busi­ness Coun­cil of Aus­tralia and the Prop­erty Coun­cil of Aus­tralia] do­ing more. There’s enor­mous busi­ness ac­tiv­ity go­ing on with Chi­nese in­vestors... if we’re not care­ful, that will de­velop in a par­al­lel uni­verse, which I find cu­ri­ous from a macro level.”

PwC Aus­tralia tax part­ner Ken Woo has also de­cided it’s time to take ac­tion. He has helped the firm de­velop a cul­tural di­ver­sity and in­clu­sion strat­egy with tar­gets. Though he’s been a part­ner since 1999 – and al­ways saw the busi­ness op­por­tu­nity from di­ver­sity – he has only started speak­ing out in the past two years. “You need to be at a cer­tain point where you have po­lit­i­cal cap­i­tal to burn, be­cause you will burn it,” he says. “I wouldn’t ad­vise any­one com­ing through the ranks to be­come known as a di­ver­sity sup­porter, as it can ear­mark you as a trou­ble­maker.”

A penny-drop­ping moment for Woo came in a meet­ing when dis­cussing tal­ent and some­one said, “We’re all aware that Ken is cul­tural di­ver­sity in the firm.”

“Some days I’m in the ma­jor­ity group and some days I’m an out­sider and you de­velop em­pa­thy,” he says. “I’ve been in the power group for 17 years and many of the peo­ple I want to change are my mates. How do I do that? We have to en­gage the main­stream and re­think the ap­proach we’re all tak­ing.”

Aac­tion across the busi­ness sec­tor is gain­ing mo­men­tum, with bod­ies like the Lead­er­ship Coun­cil on Cul­tural Di­ver­sity, chaired by Sout­phom­masane, set up last year.

Di­ver­sity spe­cial­ist Julie Chai launched the Asian Lead­er­ship Project in June and says there has been na­tional in­ter­est in the body, which is part­ner­ing with PwC Aus­tralia and de­vel­op­ing a work­ing re­la­tion­ship with the Aus­tralian Institute of Com­pany Di­rec­tors (which has an­nounced that it’s con­sid­er­ing in­tro­duc­ing cul­tural di­ver­sity tar­gets). Asians, says Chai, “have no ca­reer paths or role mod­els”. So the lead­er­ship project runs master­classes and aims to es­tab­lish a “tal­ented Asians list” for iden­ti­fy­ing board and C-suite can­di­dates.

The Lead­ing for Change blue­print, which Woo con­trib­uted to as a mem­ber of the work­ing group formed by Sout­phom­masane, rec­om­mends that or­gan­i­sa­tions: en­sure CEOs be­come role mod­els by vis­i­bly le­git­imis­ing and ad­dress­ing the prob­lem; mea­sure di­ver­sity and in­tro­duce tar­gets and ac­count­abil­ity; and use ed­u­ca­tion as a way to deal with bias and re­de­fine as­sump­tions about lead­er­ship.

Tar­gets have made a dif­fer­ence, says Woo, with PwC Aus­tralia meet­ing its 20 per cent tar­get for cul­tur­ally di­verse part­ners by 2016 and aim­ing for 30 per cent by 2020.

Although there is lit­tle ev­i­dence to show that some sec­tors are more in­clu­sive than oth­ers, the lat­est wave of ac­tiv­ity is be­ing led by pro­fes­sional ser­vices and banks

Miriam Silva, pres­i­dent of CEDA’s State Ad­vi­sory Coun­cil, SA and NT

Lisa Chung, non-ex­ec­u­tive di­rec­tor of APN Out­door and for­mer part­ner at Mad­docks and Blake Daw­son (now Ashurst) MANY TAL­ENTED AUS­TRALIANS ARE GO­ING TO SIN­GA­PORE OR HONG KONG, WHERE THEY FEEL MORE AT HOME. IT’S JUST A RIDICU­LOUS WASTE.

such as West­pac and Com­mon­wealth Bank. Some of this ini­tia­tive is about re­flect­ing client ex­pec­ta­tions or changes in own­er­ship.

When Ka­t­rina Rathie was in her first job at Mallesons Stephen Jaques two decades ago, she was the law firm’s first lawyer and part­ner of Asian de­scent. In her cur­rent role as part­ner in charge of Sydney for King & Wood Mallesons – and five years af­ter the merger of Mallesons Stephen Jaques with Chi­nese firm King & Wood – she es­ti­mates that of its 2700 lawyers in Aus­tralia and Asia, there are 1600 of Asian ori­gin as well as nine cul­tur­ally di­verse part­ners in Aus­tralia.

Rathie’s fo­cus on cul­tural di­ver­sity has had a tan­gi­ble im­pact on ap­point­ments. “I’ve got three Asian as­so­ci­ates and when I put out a job spec­i­fi­ca­tion, I got 20 ap­pli­ca­tions from Asian women – that’s never hap­pened be­fore in my 23 years as a part­ner. That’s be­cause they see me as some­one who sup­ports [cul­tural di­ver­sity].”

The bar­ri­ers to the C-suite are less eas­ily tack­led. Although few busi­ness lead­ers will ad­mit that ap­point­ing a non-Cau­casian to the top job car­ries risks, Long says boards need to un­der­stand the so­cial and cul­tural con­text of such ap­point­ments and re­alise th­ese CEOs may need dif­fer­ent sup­port. There’s some work to do in this area, con­cedes Bansal. But in­stead of mak­ing any­one feel guilty or us­ing quo­tas, there has to be some rais­ing of per­sonal aware­ness. “Ev­ery board should go through cul­tural bias train­ing rather than say­ing there should be 30 per cent [cul­tural di­ver­sity] on the board.”

The pres­sure for change is build­ing be­yond the busi­ness case. It’s only a mat­ter of time, says Woo, be­fore a cul­tural di­ver­sity dis­as­ter oc­curs in an Aus­tralian or­gan­i­sa­tion. “Many [im­mi­grant] fam­i­lies made sac­ri­fices and if they find how their chil­dren are be­ing treated, they will have some­thing to say about that; they are clients, too, and there comes a tip­ping point be­cause of po­ten­tial dam­age to rep­u­ta­tion and brand.”

Ad­dress­ing th­ese is­sues is not sim­ply a case of fol­low­ing gen­der di­ver­sity strate­gies, though many ob­servers do see some over­lap. Olsen says sev­eral Work­place Gen­der Equal­ity Agency tools work well in this area.

A model such as Male Cham­pi­ons of Change, formed to get more women into se­nior lead­er­ship, re­lies to an ex­tent on pow­er­ful men re­lat­ing to the is­sues be­cause of their fe­male rel­a­tives, says Sout­phom­masane. “We can’t al­ways rely on that em­pa­thy. Not ev­ery­one has some­one in their cir­cle from a dif­fer­ent cul­tural back­ground. It re­quires those who don’t ex­pe­ri­ence racial prej­u­dice to lis­ten to those who do.”

And claim­ing to be “racially blind” is part of the prob­lem, not the so­lu­tion. “That’s the worst thing to say, be­cause you need to see race,” says Long. “Don’t de­fine me by that but don’t erad­i­cate my iden­tity. See it and be open to some­one who is dif­fer­ent.”

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