Australia is often described as a multicultural success story. Yet our cultural diversity isn’t yet reflected in the ranks of leadership within society. The ethnic and cultural default of leadership in Australia remains Anglo-Celtic. Unfortunately, we might not be making the most of our talents.
Last year, I brought together the University of Sydney Business School, Westpac, PwC and Telstra to investigate the cultural diversity of Australia’s senior leaders in business, politics, government and civil society.
For the first time, a picture of the cultural composition of Australian leadership can be formed. We have collated data on whether chief executives and equivalents can be classified as having Anglo-Celtic, European, non-European or Indigenous backgrounds.
Our findings make for a bleak story for cultural diversity. While an estimated 32 percent of the general Australian population has a background other than Anglo-Celtic, this was not proportionately represented among leaders anywhere.
In corporate Australia the ranks of senior leaders remain overwhelmingly dominated by those of Anglo‑Celtic and European backgrounds. Among the 201 chief executives of ASX 200 companies, 77 percent have an Anglo‑Celtic background and 18 percent have a European background. Only 10 chief executives – or 5 percent – have non-European backgrounds. None of the 201 chief executives has an Indigenous background.
Similar patterns prevail elsewhere. In the last federal Parliament, 79 percent of the 226 elected members in the House of Representatives and the Senate had an Anglo-Celtic background; and 16 percent had a European background. Those who had a non-European background make up less than 4 percent of the total, while those who had an Indigenous background comprised just under 2 percent.
In the Australian public service, diversity is also dramatically underrepresented. Of the 124 heads of federal and state departments, it is notable that there are only two who have a non-European background (less than 2 percent) and one who has an Indigenous background (less than 1 percent). Eighty-two percent of departmental heads have an Anglo-Celtic background, with 15 percent having a European background.
Among Australia’s universities, all of the 40 vice-chancellors either have an Anglo-Celtic background (85 percent) or a European background (15 percent). There is not one vice-chancellor who has either an Indigenous or non-European background.
Do such patterns represent a problem? If Australian society were to work along genuinely meritocratic lines, diversity shouldn’t be so underrepresented. We certainly don’t see a lack of diversity when it comes to our highest achieving high school students or our leading university graduates.
Cultural assumptions linger about what leadership must look and sound like. Professionals from particular cultural backgrounds can be stereotyped as being more suited to technical or back-office roles, and not appropriate for leadership. From personal experience, there have been numerous occasions when people who, when told that I work at the Australian Human Rights Commission, assume that I work in the finance or IT sections.
The case for change is twofold. Achieving diversity is both the right thing and the smart thing to do. Having more cultural diversity in leadership can make for better decision-making and performance.
Analysis conducted by McKinsey, for example, has shown a positive relationship between cultural diversity and financial performance. In an international study of 366 companies, McKinsey found that companies in the top quartile of cultural diversity were 35 percent more likely to have financial returns above the national industry median. It found, in fact, that the benefits of cultural diversity may be even greater than those generated by gender diversity.
Getting change on cultural diversity requires a shift in mindset. Culture remains a poorer cousin in the diversity family. There is still a widespread view that organisations can do only one kind of diversity at a time – that there isn’t enough bandwidth to deal with cultural diversity. With such a multicultural workforce, though, cultural diversity cannot be left on hold indefinitely.
In practical terms, taking action means the following: it means senior leaders having some skin in the game on culture, as they are starting to have on gender; there is also a need to collect better data, set targets, counter bias, and nurture culturally diverse talent.
Talking about cultural diversity isn’t always straightforward. Too often, we lapse into easy celebration – thinking that cultural diversity is all about food and festivals. It’s time to think more seriously about the substance of our multiculturalism. Valuing diversity must also mean leaving room for it not only in the lobby or lunchroom, but also in the corridors of power.
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This article was published within The Sydney University Business School’s Alumni Magazine. The original version of this article by Tim Soutphommasane, ‘Our leaders don’t reflect who we are’, was published in the Sydney Morning Herald on 28 July 2016.
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