Innovation and Science Australia (ISA) chair Bill Ferris wants Australian companies to make structural and cultural changes to their boards of directors, and to look beyond simple gender balance when addressing at diversity issues.
Mr Ferris challenged them to appoint directors who are younger, from different cultural backgrounds, and who have deep technical expertise as the key to diversity on boards.
“While gender balance is an urgent and laudable pursuit and priority, I actually think it’s time to move beyond this gender pursuit,” Mr Ferris said during a speech to the Australian Institute of Company Directors on Thursday.
He said “diversity in this country needs a re-take on the age imperative,” suggesting the average age of consumers versus the age of board members “just doesn’t compute”.
“How many directors do you have under the age of 30? How many directors do you have under the age of 21? What is the average age of the consumers of your products and services?” he questioned.
He raised similar concerns in relation to culture. As a consumer market, Asia dwarfs the Australian domestic market, yet pointing to boards that include “very few members of our Asian community in this country”.
“I could make the argument that unless board ticks these governance boxes of boardroom diversity, they would be non-compliant. They would be seen as not fit-for-purpose in managing risk and opportunity for shareholders.”
He also wants more engineers, scientists and digitally savvy people in the board mix and says one solution might be to appoint academics.
“I do think many of our boards have become so anti-intellectual they close their minds to really great ideas out there, and we’re letting ourselves down,” he said.
“Directors with literacy skills, and are embracing digital technology, and others with deep engineering skills will offer significant strategic advantage to firms navigating this century’s economy.
“[These kinds of] skills are no longer nice to haves; they are core to the ability. Prioritising seats at the table to those who can offer these insights is a key challenge facing Australian boards.”
While acknowledging that successful collaboration between industry and academia had long been fraught in this country, he said in order to see more academics appointed to boards, the decisions needed to be actioned from the top down.
“I think from chair and CEOs down, and vice-chancellor down, they should start thinking about some targets – not quotas – to drive action,” he told InnovationAus.com.
“That will involve some disappointments along the track, but unless we single it out to drive it as a project with targets, it will just be rhetoric.
“There needs to be some encouraging in a behavioural leadership from the top. It is a bit like a tool to drive culture change. The tool would be recruitment and invitations for cross-board reputation.
“There are some business people on university boards, but that won’t do it. What you need is more of them in the trenches.”
“And what would be equivalent on the other side is just doing more research projects, which is why we’re banging on about collaboration, commercialisation and spinning off ideas.”
For the first time last year, Mr Ferris said new rules to access the research block allocation grants were piloted, and he believes such cases would likely encourage more industry-academia collaboration.
“This is a big actual change in the criteria. It’s still early days. We are seeing, like other people, academics know where the money is, so we’re already seeing a response from vice-chancellors down. I’m a glass half full that [more academics can get involved], but you just have to drive it.”
Mr Ferris’ push for increased business-academia collaboration comes ahead of next month’s federal budget, which is also D-Day for when the ISA will find out which–of the 30 recommendations it made in its 2030 Strategic Plan will be funded by government.
Treasurer Scott Morrison has signalled major changes to the $3 billion-plus R&D Tax Incentive (RDTI) that will be detailed in May.
Part of the overhaul includes rewarding companies that collaborate with a universities with a “premium” level of tax break to further incentivise increased business engagement with institutional research.
“It might signal and enable the rebalancing of incentives government deals with, and start to better resemble what our competitors [in overseas markets] have been successful in,” Mr Ferris said.
Mr Morrison told InnovationAus.com that he would have a lot more to say about innovation on budget night.
Other short-term imperatives, Mr Ferris said the ISA would like to see include support for other direct measures, including the export market development grant scheme, the cooperative research centre program, international growth centres, and the national infrastructure for science and research
During his speech Mr Ferris also recommended for company directors to prioritise innovation as a core agenda when it comes to addressing company performance, pipeline and behaviour.
“These shouldn’t be just occasional thoughts in the shower, they need to be agenda items on top of the list at every meeting,” Mr Ferris said.
Understanding and deploying artificial intelligence and machine learning should also be a focus for directors, just as it should be for the nation’s broader leadership. This was imperative for Australia to remain at the forefront of economic development.