High-profile technology investor and former Queensland government chief entrepreneur Steve Baxter has defended comments he made in a heated Facebook argument about the issue of affirmative action in business.
Mr Baxter waded into a discussion in the usually convivial Sydney Startups Facebook group, as tempers had already frayed in a discussion triggered by news that Goldman Sachs had said it would no longer do IPOs for companies with all-male boards.
His opening gambit in the conversation was “Talk about sexism. What a load of rot,” as other members of the group argued about the need for quotas versus merit-based hiring, and entrenched sexism in business decisions. He later said those advocating for quotas were ignoring merit and needed the bar to be lowered for entry.
Like many in the discussion, Mr Baxter said he supported more women rising through the ranks, but raised beliefs that quotas simply addressed a symptom, not a cause, and resulted in arbitrary appointments.
“Your goal here is easy, give women a route to board membership that is easier than if they were a man – I am about merit,” Mr Baxter said in one of his posts.
“Evidence of unequal outcome is not evidence of discrimination. What unconscious bias? You think that because decisions do not split to a certain proportion there must be bias and if it can’t be identified, it must be less than conscious,” Mr Baxter wrote in another post.
Asked about his comments by The Australian Financial Review, Mr Baxter acknowledged that unconscious bias did exist in some circumstances (such as interpreting CVs,) and said he was not bothered if a board ended up being all female, as long as gender had not been a factor in the appointments.
“In my business, it’s a matter of continuing to include the largest possible group in your selection population and then rank through returns, or whatever metric your business uses. We look at hundreds of opportunities a year and we’d be nuts to exclude a certain group,” he says.
“[But], if efforts to counter unconscious bias mean there is conscious bias, then there is a problem. If [policies] favour a certain group, that’s just silly.”
Founder of finance and technology public relations firm Third Hemisphere, Hannah Moreno, found herself the target of numerous members of the start-up Facebook group, when she called out sexism in some of the arguments being put forward against insisting on female board members.
She told the Financial Review she was surprised to see so many people actively arguing against social progression.
“I was surprised to see how many men were concerned about Goldman Sachs’ move to address diversity on boards as a performance indicator,” she says. “It was also such a mild move too: they weren’t demanding 50 per cent female board representation, or even 30 per cent. Literally just don’t be 100 per cent male and we will take you to IPO.
“What was frustrating was that everyone actually agreed that we all want a meritocracy. However, those arguing against Goldman Sachs felt that we somehow already live in one – despite study after study demonstrating subconscious and conscious bias and disadvantage working against women in the workforce for centuries.
“Strong governance and best practice demands identifying and removing the systemic barriers that prevent our companies from being as successful as possible. Removing these barriers is not an act of discrimination in itself, as some were suggesting in the discussion.”
Baxter says he was arguing that positions should be filled by the best available and attainable candidate.
Research conducted by The Australian Financial Review in 2019 revealed that local venture capital funds tracked higher than their international peers when it came to the diversity of entrepreneurs being backed. However there were still very few female VC partners.
Studies have also revealed that companies with at least one female co-founder perform better financially over time than those with all-male founding teams. Research by Boston Consulting Group and Mass Challenge published in 2018 found that over five years companies with a female co-founder generated 10 per cent more culmulative revenue.
Looking at ASX200 companies, as of September 30 last year there were seven with no female board members (TPG, Hub24, NRW Holdings, Pro Medicus, PolyNovo, Silver Lake Resources and Speedcast International).
Research conducted between 2005 and 2017 by AXA IM Rosenberg Equities demonstrated companies with more diverse boards had higher returns on equity, greater profitability one year on and were more likely to keep competition at bay.
M8 Ventures investor Alan Jones, who made the initial post that started the Facebook row, says it is clear that diversity progress is not multilateral across the ecosystem.
“I thought the post would be mostly ignored, and some people would be sceptical about the bank … but I did not expect the male gender trolls to jump on,” he says.
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“What drew me in eventually was seeing all these women who I haven’t met … boldly step forward, without coming from a position of privilege … and they weren’t willing to let the men get away with it.
“We’re meant to be the experimenters. We’re supposed to be the people that say maybe merit and quotas can co-exist. But so that we can get to that position … perhaps you need to find more women first.”
Cicada Innovations chief executive and diversity advocate Sally-Ann Williams says companies and boards should consider implementing a policy where an appropriately qualified woman had to be considered for a role alongside a man, after which decisions could come down to merit.
She says the debate needs to be reframed around the opportunity cost of not having the most qualified, diverse workforce possible.
“What we want to do is really remove the systemic barriers and biases that have been in this country for decades, centuries even, and find pathways that raise the bar for everyone,” she said.
“It’s about creating pathways and opening doors, not handouts.”