Only 3 per cent of Australian board directors have a STEM background, and it’s affecting innovation and diversity of skills in the boardroom.
A recent report by the Australian Institute of Company Directors (AICD) found that the nation’s boardrooms are lacking in innovative thinking and technical skills — and that the gap needs to be addressed in line with issues such as gender and cultural diversity so that Australian companies do not fall behind.
AICD’s General Manager of Advocacy Louise Petschler told create that the Driving innovation: the boardroom gap report revealed a lack of skills diversity at a corporate governance level.
“The report highlighted that Australian boards have low technical and innovation skills, and the need for boards to increase access to specialist advice,” she said.
“It is clear that more needs to be done to broaden the director talent pool to include individuals with STEM backgrounds.”
Petschler also noted that a 2017 report by the 30% Club found that finance, law and operations and management were the predominant areas of director expertise, while around 12 per cent of male directors had engineering expertise. This was notably lower for female directors.
“It is important to have a diverse mix of backgrounds around the board table to help foster a healthy discussion with a variety of views and perspectives,” she added.
“This has been shown to increase board performance and reduce the risk of groupthink, which leads to better outcomes for shareholders, consumers, employees and the community. This is particularly important given the need to boost innovation and growth in the current climate.”
Moving the needle
Chris Champion, National President and Board Chair at Engineers Australia agreed that engineers have important skills and experience to help steer companies through the major challenges of our time.
“The skills developed by engineers over their career are needed and relevant to boards at a governance level, such as scenario planning in our current COVID-19 environment, strategy and risk management,” he said.
Champion said that getting on a board is competitive, so it is good for engineers to build up some governance experience, such as volunteering on not-for-profit boards or committees.
Networking with colleagues who are already on boards can also provide helpful insights and experience, while undertaking the AICD company directors course is generally considered the minimum qualification.
“You need a different CV than your executive management, professional or engineering CV — you need to present your board and governance skills, experience and thinking,” he said.
“If you don’t have a lot of governance experience, you need to describe your professional and executive experience and achievements in terms of the governance attributes needed to be successfully appointed to a board.”
While there are many CEOs with STEM backgrounds, a large proportion don’t make the transition to governance roles. But Champion believes that this is beginning to change, particularly because engineers are intimately involved in leading Australia out of many crises or challenges.
“Engineers should realise that a board portfolio can be a rewarding career progression where their professional skills and experience can add great value to the governance of an organisation,” he said.
“This should not be seen as only an end of career objective. I would encourage engineers to start planning for a governance career or roles mid-career.”
Be the change you want to see
Engineer and founder of Board Presence Stacey Daniel FIEAust CPEng said that barriers to engineers on boards include professionals not fully understanding the opportunities available, misconceptions about boards being exclusive or for more experienced individuals, and uncertainty about how to get involved.
“We need more engineers on boards to diversify the boardroom skills and help with information-based decision-making,” she said.
“Entities with digital and physical assets, are in particular need of such technical insight.”
To this end, Daniel said that engineers can speak to the deficit of trust in leadership and evidence-based decision-making in corporate governance, as engineers are one of the most trusted professionals behind doctors, nurses and teachers.
As a female engineer who has been involved in a range of corporate boards across the country, Daniel urged aspiring directors to get involved.
“Engineers are valued in these environments because of their analytical and problem-solving skills for decision-making,” she said.
“Their minds think creatively, they are collaborative and make information-based decisions.”