Financial acumen helps women to achieve leadership roles

Women are still under-represented in senior positions across public and private organisations. Speakers at the recent Women in Health Leadership symposium considered why this is the case, and whether financial acumen could help women to achieve the most senior positions.

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The recent Women in Health Leadership Symposium in Sydney brought together some of the sector’s most senior women – but they’re still in the minority.

In her talk on gender and leadership, Alison Verhoeven, CEO of the Australian Healthcare and Hospitals Association, noted that women are under-represented in senior positions across both public and private sector organisations. There is some positive news in the public sector, where targets and gender equity programs have helped to lift the proportion of women in senior and middle management positions from 35 percent in 2002 to 46 percent in 2012.

However, the corporate sector has been slow to follow. A 2015 study by Australian diversity and productivity researcher Conrad Liveris analysed the gender composition of the chief executives and chairs of the top ASX 200 listed companies. He found that women held just 23 of the 400 positions.

Confidence or competence?

Speaker Elizabeth Koff, Chief Executive at The Sydney Children’s Hospitals Network, questioned whether this discrepancy could represent a lack of confidence or competence.

Competence doesn’t appear to be a problem, with women consistently out-performing men in terms of their education. In 2011, 57 percent of the students in higher education were women. But competence is complex and multidimensional. No matter how effectively women are performing in a management job they need a very different skillset to be able to take on the role of CEO. All business leaders must be able to understand and question every aspect of the organisation in order to drive the budget and the company’s performance.

At board level, the importance of financial literacy was brought home by the Centro case in 2011 when Justice John Middleton found that directors couldn’t rely on their auditors to ensure the accounts were correct. Centro’s directors had breached the Corporations Act by not checking the figures.

These days, all directors are expected to be able to read the story behind the figures, to recognise if something doesn’t look quite right and to be able to ask the right questions. Whatever their area of specialisation, it’s vital that both men and women have the ability to read financials and truly understand how these will affect the people they employ and the services they provide. Several women also spoke of the confidence that comes with having all financial bases covered.

A financial springboard

A report from the UK-based Cranfield School of Management called Women in Finance: A Springboard to Corporate Board Positions shows that, in the United Kingdom, women with financial qualifications, or a background in financial acumen, are more likely to be appointed to senior positions or the board of a leading company.

The report showed that 65 percent of female executives have financial qualifications or a financial background, and that more than half of new female non-executive directors have a functional background in finance.

Co-author of the report Dr Ruth Sealy, who at the time was the Deputy Director of the Cranfield International Centre for Women Leaders, said that a certain level of financial acumen is necessary for all board directors. However, for women, having a finance qualification or functional background helps to break down some persistent stereotypes about women’s competence, giving them credibility, legitimacy and a common language that allows them to join the conversation at a board level.

The Women in Health Leadership Symposium was presented by the Australasian College of Health Service Management. NAB was a major sponsor.

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