Today is Harmony Day, coinciding with the United Nations International Day for the Elimination of Racial Discrimination, and is a day for all Australians to embrace cultural diversity. This Harmony Day, DCA looks at Australia’s need to ‘crack the cultural ceiling’ so Australian business can experience the business benefits of culturally diverse leadership teams.
Although the cultural diversity of ASX board directors is growing, boardrooms do not yet reflect the cultural diversity of the wider community. DCA research has shown that only 22.2% of directors are ‘culturally diverse’ compared to 32.2% in the general Australian community. Furthermore, most culturally diverse directors have North West European cultural origins (10.9%). When a narrower definition of ‘culturally diverse’ is adopted, excluding those from North-West Europe (e.g. the United Kingdom, Ireland and Germany), the degree of culturally diverse business leaders drops by at least half.
The proportion of business leaders with Asian cultural origins is also relatively low compared to the general community, especially given the importance of the Asian region to Australia’s future economic growth. Only 1.9% of executive managers and 4.15% of directors have Asian cultural origins (versus 9.6% in the general community).
"Much attention has been given to addressing gender diversity in our leadership ranks and the benefits to be gained from doing so, yet there has been little focus on similar gaps in cultural diversity. It's time for organisations to look harder at what is preventing culturally diverse talent rising to the top so we can start dismantling the 'cultural ceiling'," said DCA’s CEO Lisa Annese.
Embracing cultural diversity is not only about doing the right thing by increasing tolerance and social inclusion in our communities. For business, there are also considerable bottom line benefits. A growing body of research shows that in Australian organisations, leveraging cultural diversity helps develop and respond to new markets, both here and overseas; helps capture the best talent, wherever it is; and delivers improved productivity and innovation.
Advances in technology are transforming our lives - the way we work, the way we communicate and the way we access services - and for organisations trying to meet these challenges through innovation, embracing cultural diversity is critical. Research has shown that people with global experience and/or multicultural identities display more creativity, are better problem solvers and more likely to create new businesses and products. Culturally diverse teams can also access a deeper and wider knowledge bank, leveraging this to generate new ideas, products and creative solutions.
Other DCA research has found that stereotypes about what makes a good leader are part of the problem. In the case of Asian talent, some 61% of people who identify themselves as coming from an Asian background experience considerable pressure to conform to existing leadership styles that are inherently ‘Anglo’, e.g. over-valuing self-promotion and assertive direct communication, while undervaluing and misinterpreting quiet reserve, deference and respect for seniority.
DCA recommends the following strategies for developing a more culturally aware leadership model:
- Promote and value a broader view of 'the effective leader' – one that recognises that different types of leaders, skills set and demeanours can be of organisational value.
- Critically review your leadership model and succession planning criteria and assessment to ensure these do not unintentionally filter out culturally diverse talent.
- Educate decision makers and recruiters about avoiding cultural bias and the importance of valuing skills and experience gained overseas.
- Partner with specialist recruiters or general recruiters who include culturally diverse talent in their candidate offerings.
- Diversify performance feedback and assessment approaches to ensure these are responsive to any cultural differences in communication and leadership styles, and revisit the emphasis placed on behavioural-based interviewing.
- Monitor your learning and development metrics to ensure emerging culturally diverse leaders access career development opportunities at equivalent rates to other colleagues.
Access DCA's Capitalising on Culture report on cultural diversity in ASX-listed company boards, and Cracking the Cultural Ceiling: Future Proofing Your Business in the Asian Century.