Interview: Lack of Asian diversity in business potentially hindering Australia's success in Asia-Pacific: talent scout

A lack of diversity in Australia's largest companies is potentially costing the Australian economy billions of dollars as the Asia-Pacific region becomes economically interconnected.

Australian business leaders have consistently argued the nation's foreign language and cultural capability has been lagging despite government and tertiary education programs fostering Asian learning.

Australia's largest businesses however are hindering themselves as they seek to take advantage of Asia's rising middle class and associated 10 trillion U.S. dollar consumer market due to a significant lack of board and senior executive diversity, particularly with persons from the Asian region, an enterprise talent scout told Xinhua.

"There is a lack of diversity in the boardroom, and a lack of perspective about Asian culture and the way business is done," Kelly Hammond, chief executive of talent sourcing specialists the Director Institute said, adding not having those with Asian backgrounds is a "very big mistake."

"There certainly is the talent pool there. There are many, many highly qualified senior Asian executives but there obviously is the barrier to the boardroom in particular" where key strategic decisions are made.

Hammond said the way senior management of Australian public listed companies hasn't changed over the past four decades, hence 70-80 percent of senior executives are from similar privately educated, Anglo-Saxon backgrounds with very limited skill set diversity.

The creation of the "Bamboo Ceiling" from groupthink stereotypes has caused only 1.9 percent of senior executive positions in ASX 200 listed companies being held by people of Asian backgrounds, despite making up 9.6 of the local population.

"When you have a situation where you do have a lot of groupthink going on, I don't believe you are making the best decisions, and I don't think you are aware of the opportunities and the challenges of doing business in the Asia-Pacific region," Hammond said.

Interestingly though, "private companies get it," creating more diverse workforces through both gender and cultural backgrounds for senior positions, however the rate of change in Australia's ASX 100 and 200 listed companies has been too slow.

Australia has reached a "tipping point" with regards to the need for diversity, hence governments should be looking to implement legislation to create workplace diversity quotas and ensure board members are financially responsible for strategic decisions of their companies, Hammond said.

This could mean board members are forced to have "skin in the game" by purchasing shares equivalent to one-year worth of board-fees.

"It's critical to Australia's success in the wider Asia-Pacific community," Hammond said. Endit