Kathy Rao

Diversity proves key for corporate futures

When Kathy Rao emerged from Flinders with an accounting degree, Corporate Social Responsibility (CSR) was a known phrase, but had not yet become a key issue at annual general meetings and corporate boardrooms.

Ms Rao was interested in the role that board diversity had to play in driving CSR and so she enrolled in a PhD. She set about interviewing company directors across Australia, gaining first-hand insights into the relationships between board diversity and CSR for the first time.

“Many studies had already looked at the correlation between board diversity and reporting of corporate social responsibility outcomes, but they all used secondary data reported by the companies or governments,” Ms Rao said.

“I wanted to get some deeper insights into the relationships that drove CSR.”

Ms Rao enrolled in a PhD and set about interviewing company directors across Australia, gaining first-hand insights into the relationships between board diversity and CSR for the first time.

“I found that board diversity influences all decisions positively as well as encouraging companies to act on CSR,” Ms Rao said.

“However, we still have a way to go. When I interviewed male directors they said there was a shortage of talented women to choose from, but when I interviewed female directors they said there were plenty of talented women but boards were reluctant to appoint female directors.”

One female director related the story of the male chair of her board going to interview a potential new female director at lunch, but deciding she wasn’t suitable on the grounds that she declined to have a glass of wine with lunch and therefore wouldn’t fit in.

“Overcoming these issues is important for Australian boards because they say themselves how important CSR is – and yet it is difficult to achieve effectively without board diversity,” Ms Rao said.