Martin C. Jones

In a survey last year of 22,812 people across 22 countries (including Australia), the polling organisation GlobeScan found that environmental concerns had fallen worldwide since 2009, and fewer than one in two people (49%) now viewed climate change as a “very serious” problem. GlobeScan’s chairman, Doug Miller, commented: “Scientists report that evidence of environmental damage is stronger than ever – but our data shows that economic crisis and a lack of political leadership mean that the public are starting to tune out.”

Miller’s comments could have been tailor-made for Australia. The famous “hockey stick graph” of rising temperatures has been confirmed, and atmospheric greenhouse gas concentrations spiked dangerously upward in 2012. The Australian Climate Change Commission found that climate change is already adversely affecting Australians with record-breaking heat, severe bushfires, extreme rainfall, and damaging floods – byproducts of the “Angry Summer”.

Yet with the centrepiece of Australia’s climate policy not even a year old, most Australians are sick of it, or sick of hearing about it – fewer than 13% trust what politicians say about major public issues like climate change. And in the shadow of the Clean Energy Future package (CEF), state and federal governments are quietly letting other climate policies slip.

This “abdication of climate policy”, as Tristan Edis calls it, wouldn’t be so bad if Australia’s climate policy were perfect. But it isn’t; no policy is. The carbon price, while worth having, is a broad, blunt tool that covers two-thirds of Australia’s greenhouse gas emissions. The rest of the CEF fills in some gaps, but there is ample room for further complementary climate policy at a state and federal level.

I wrote last year on this topic, giving reasons why state (or other federal) climate policies could still be worthwhile under the CEF. This would mean innovative approaches such as:

• addressing areas that don’t respond well or rapidly to price changes
• shifting habits, socially-shaped preferences, or intrinsic motivation
• investing in worthwhile programs the private sector is unlikely to fund
• addressing goals other than least-cost abatement, such as improving energy efficiency in disadvantaged households
• making Australia’s climate policy robust; that is, giving it the ability to maintain a minimum level of performance under a range of possible future conditions.

My colleague, Paul Twomey, wrote in a similar vein the year before.

Academics aren’t alone in regarding (some) additional policies positively. Five years ago the federal government received a strategic review of its climate change programs, assessing them for efficiency, effectiveness, appropriateness, and complementarity with the Carbon Pollution Reduction Scheme (CPRS, the forerunner to the current Clean Energy Future package).

Named after its author, the 249-page Wilkins Review formalised criteria that governments could use to assess which climate policies complement a federal carbon price. Reasons for needing complementary policies included market failure, inefficiency, covering sectors that emissions trading can’t, helping people make informed decisions to change their behaviour, social equity, or where the underlying problems of climate change differ across regions. Some of those may sound familiar.

And it’s not as though states have never complemented federal policy, in climate or in other areas. One of the great benefits of federalism is that states can compete with each other to provide better policies, the best of which then (ideally) percolate to the national level. NSW had an emissions trading scheme in 2003, one of the first in the world. Queensland started transitioning to a lower-carbon economy in 2005 with its 13% Gas Scheme. Victoria’s Industry Greenhouse Program to regulate industrial emissions and energy efficiency was another world-leading climate policy.

Indeed, under the constitution, states – and councils – have a duty to act in many areas. They hold powers the federal government doesn’t – education, the environment, or town planning. These are clearly areas where state and local governments should be complementing federal climate policy, as they have not only the power but the best knowledge of the field. They are, quite literally, at the coal-face and on the front line of disaster management.

The need for climate action remains. The scope for complementary policy remains. The duty of governments to act remains. But in many areas, they are going backward. Energy efficiency activities are being scaled back. Construction of renewable energy plants is being cruelled. And electricity price freezes or subsidies are on the cards – as far from a complementary measure to a carbon price as is possible. How you can you make a polluting product more expensive if it’s subject to a price freeze?

These actions make Australia dangerously vulnerable to the fate of its carbon pricing scheme, and there’s no certainty it will last the next term of government. If the CEF is scrapped, or fails, what do we have to replace it? The Coalition’s Direct Action package has a far narrower scope than the current carbon price, and relies on soil carbon measures unproven at the suggested scale and cost. State governments aren’t competing to beat each other or the federal government on climate policy, as they once did.

As the risks of a dangerous climate increase, Australian governments are risking measures needed to ward it off and respond adequately. If GlobeScan polled me, I’d say that’s a very serious problem.

Martin C. Jones is an environmental economist from the Australian School of Business.

Professor Chris Styles

Michael Clarke was recently named the most influential Sportsperson in Australia by The Australian Newspaper. He won the 2012 Alan Border medal (voted for by peers, the media and umpires), and scored more runs in test cricket than anyone else in the game last year.  He even got an apology from the Sydney Morning Herald a few months back for their misjudging of him as a player and a captain.

But in the last few days he and the Australian coach, Mickey Arthur, have been heavily criticised by the public, past players and sections of the media for stepping down four players from the test in Mohali for not doing their homework. The rationale given by them was that this incident was the last straw in a string of breaches of team discipline and came on top of two large, embarrassing losses in India.  They are well paid professionals and the management team felt it was time to draw a line in the sand.

Remember when being a cricket captain just involved  setting a good field and deciding whether to bat first if you won the toss? Welcome to leadership in the 21st century.

Whether we like it or not, sport, and sports teams, look more like businesses than ever before. Probably because that’s what many have become.  Cricket is a good example.  With multi-million dollar bids for television rights, players earning exorbitant match fees and sponsors critically assessing ROI (return on investment), cricket is a sizeable business indeed. The question then becomes about how Clarke should lead the Australian cricket team in such an environment.

Taking a corporate model, Captain Clarke is equivalent to the CEO and Mickey Arthur could be viewed as Chairman of the Board.  They decide who is in and out of the team, the organisational structure, strategy and tactics.  Earlier this week, four members of the organisation didn’t comply with a request from senior management to provide their thoughts on a turnaround strategy, and they were put on ‘special projects’. One declined the offer and has taken indefinite leave.

A consultant brought in to help evaluate performance might look at a lot of things, particularly now that they can access huge amounts of data generated by various performance programs including detailed video analysis.  But the consultants might also ask one very basic question: how did it come to this?  It’s not about who did how much homework, being late for a bus, or wearing the wrong uniform.  It’s likely to be more fundamental.  The problem is really about the culture of the organisation, and any change in performance requires a change in culture.

Leaders talk a lot about culture but culture is often hard to put your finger on.  We see the outcomes of culture – behaviours, performance, staff turnover and retention – but culture itself is harder to define. Management consultants McKinsey & Co (who may have already got the call from Clarke), are attributed with a broad definition of organisation culture which is “how we do things around here”.  If we believe the reports from India, the way things were done by the Australian team appear to be pretty lax.  There would also seem to be a distinct lack of accountability on and off the field.

In simple terms, changing culture requires an organisation to decide where it wants to be and what culture would support getting there, and then collectively deciding change is needed.

Clarke has stated very publicly where he wants the team to be – to return Australia to its position as the #1 test team in the world.  He has also obviously decided that currently, ‘how things are done around here’ isn’t going to support the achievement of that goal.  So he, and the coach, have decided to get tough. Llike those in the corporate world, perhaps Clarke’s big leadership test will be his ability to bring everyone in the team along with him.

Professor Chris Styles is Deputy Dean and Director Australian Graduate School of Management (AGSM).

Professor Renée Adams

It’s accepted across the globe that women are under-represented in business leadership positions and that something should be done about it. To date, the focus has been on increasing the number of women invited to sit as non-executive directors on boards. The aspirational figure is 40% female representation, with some countries legislating quotas and others just setting targets.

While championing diversity in this way may have merit, it’s like treating a symptom rather than the disease. Quotas and targets seem too narrow a policy tool to address the underlying factors associated with the lack of women reaching the top.

My recent research, in association with Tom Kirchmaier from the University of Manchester, has found a strong correlation between the rates of full-time female labour-force participation and the number of women in boardrooms. That is, countries with more women working full-time have more women on boards.

It stands to reason that in order to gain the experience necessary to be a director, you have to have a career. Not all women, particularly those with children, are able to sustain one. Legislators need to look at developing policies that promote full-time employment by women to generate a pipeline of talent that can eventually perform leading corporate roles.

When most people talk about representation on boards, they are looking at the largest listed companies – the top 100, or maybe the top 200. Our research studied a more comprehensive sample comprising 9,888 listed companies in 22 countries: Australia, Austria, Belgium, Bermuda, Canada, Denmark, Finland, France, Germany, Greece, India, Ireland, Italy, Luxembourg, The Netherlands, Norway, Portugal, Spain, Sweden, Switzerland, the UK and the US.

We obtained the data from business intelligence service BoardEx for a 10-year period from 2001 to 2010. To ensure our sample was representative, we restricted ourselves to country-years for which BoardEx covered at least 70% of the total market capitalisation of listed companies in that country and year.

Aside from the correlation between full-time work and representation on boards, our data revealed that female boardroom participation was actually lower than the usual surveys suggest. For example, the 2011 Davies Report for the UK found that “in 2010, women made up only 12.5% of the members of the corporate boards of FTSE 100 companies. This was up from 9.4% in 2004.” Our wider sample showed that the proportion of unique female directors on the boards of listed firms in the UK in 2004 was only 5.1% and in 2010 it was 6.5%.

To reach a board position, women need to stay in the workforce. But our evidence suggests that full-time employment may not in itself be sufficient. The level of government services to families also appears important. More services, such as childcare, make it easier for women to remain working and to pursue ambitious career paths.

A key adverse factor that is less easily addressed is the attitudes to women imposed by cultural barriers. It’s not surprising that there are less women on boards in the more traditional societies, where staying at home being a housewife is deemed to be equally as fulfilling as going to work.

It is possible that present diversity policies which target boards directly may help overcome cultural barriers in the long run, though they may also reinforce gender stereotypes. There are three main types of these policies: quotas, governance codes and disclosure requirements. It’s not necessarily clear that their effect is going to be unambiguously positive. Affirmative action can produce negative results when the unqualified or unprepared are placed in roles just to make up the numbers.

The magnitudes of female director participation are still low, but they do show a clear upward trend over time. To foster this progression, policy-makers should try to remove the impediments to full-time labour-force participation rather than simply trying to put more women on boards.

Renée Adams is the Commonwealth Bank Chair in Finance at the Australian School of Business.

Rafal Chomik

Since its proposal at a 1910 conference, International Women’s Day, which we celebrated last week, has served as a reminder of the role of women in society and the struggle for equality.

The most commonly debated element of this struggle relates to balancing child care and work. Policy makers have responded with various measures.

In Australia and elsewhere even cuts to parental benefits are justified on the basis that they are aimed to help parents, particularly single mothers, into work. The recent introduction of paid parental leave for fathers and partners is intended to help parents become more equal in balancing work and family. And in courting women’s votes for the upcoming federal election the Coalition has pledged to take the issue further by proposing to extend paid maternity leave.

But another area of unpaid work in which women overwhelmingly participate involves care for people with disabilities and the elderly. Australian Bureau of Statistics data on unpaid care shows that women comprise 68 per cent of primary carers overall, 92 per cent of primary carers of children with a disability, 70 per cent of primary carers of parents, and 52 per cent of primary carers for partners. It translates to 1.5 million Australian women acting as either primary or secondary carers.

The benefit of this unpaid work is considerable. One set of recent estimates puts the value of unpaid care by both women and men at $650 billion – equivalent to 50.6 per cent of GDP.

But carers often bear the cost of their unpaid responsibilities. Informal care is associated with lower levels of formal employment, higher risks of poverty, and a higher probability of mental health problems.

Unpaid primary carers are half as likely to be participating in the labour force as non-primary carers. And when they are employed, they are twice as likely to be in part-time work and 30 per cent more likely to hold a temporary job. These impacts increase with hours of care provided.

Of course, the care involved may be incompatible with a full-time job or there may be a level of ‘self-selection’ into the role of unpaid care-giver by those who had lower market opportunities in the first place. But analysis shows that even controlling for such socio-demographic variation, informal carers are less likely to be in paid employment.

Lower employment rates, fewer formal working hours, and fewer household members with earnings can mean that unpaid carers have a higher probability of experiencing poverty. Women carers appear to be particularly vulnerable to such a risk. Moreover, less work and lower earnings during their working life translates to lower savings and incomes in retirement.

The psychological distress and isolation of caring and the lack of support are possible reasons why unpaid carers in Australia are shown to have a 40% higher rate of mental health problems than non-carers. Again, even controlling for socio-demographic characteristics shows that informal caring is associated with more mental health problems and that the impact is more detrimental for women. Being the recipient of a carers’ allowance does not seem to alter the negative impact on mental health in Australia.

With an ageing population the demand for informal care is only going to increase. Indeed, the Productivity Commission sees such care as an integral part of the Australian aged care system. At the same time, the Commission points to the likely reduction in availability of informal care due to demographic and motivational factors. Yet, most informal care is low intensity, with 55% of informal carers providing 0-9 hours of care. Such figures suggests that with the right level of support there is scope for some carers to increase their hours of care with limited impact on work and mental health outcomes. So how do we design support systems for informal carers that avoid the negative impacts?

The Australian government has started putting various measures in place. It developed a National Carer Strategy as a framework to address the economic, educational, and health needs of informal carers.

While flexible work for women with children has been on the agenda for a while, only recently has care responsibility across the life-course been recognised. Last month, the Prime Minister announced that the Fair Work Act will be amended to extend the right to request flexible working to carers – it was already available for those caring for children.

As ever, there is more that can be done. In January, the Sex Discrimination Commissioner, Elizabeth Broderick, released a report calling for a series of possible reforms to support unpaid carers including legislative mechanisms, flexible work arrangements, carer support payments, leave arrangements, services for carers, workplace initiatives and mechanisms within the retirement income and savings system.

Investing in unpaid carers would mean not only relieving pressure from the formal aged care system and improving the quality of care for recipients, it would also go some way to redress this particular area of gender inequality.

Rafal Chomik is a Senior Research Fellow at the Arc Centre of Excellence in Population Ageing Research at UNSW.

Rosemary Howard

We have all had at least one bad experience with dialing through to an Australian firm’s call centre. A long wait. Finally an operator. Answering lots of questions the firm already has in their database. Getting disconnected as they transfer you to another division, and then having to start all over again.

We often assume that these experiences are with outsourced, offshored call centres in India or the Philippines. But this is not always the case.

Sometimes offshored call centres can provide superior customer service (and at lower costs) to Australian call centres, and provide better data analytics.

When we think about the offshoring of Australian financial institution jobs, what questions should we ask?

The first I suggest is why is an organisation thinking of doing it. If the answer is as simple as cost due to Australia’s high wage structure and high dollar, then one probably needs to ask more.

As revenues are harder to come by, there is no question that Australian financial institutions (like all Australian firms) need to manage costs more carefully.

However, the outsourcing or offshoring of call centre and IT jobs should be a more strategic decision.

All firms – including Australian financial institutions – need to consider their long term strategy and therefore how they operate in that context. They need to reflect on the key trends of our time, namely globalisation and digitisation.

In the constrained post-GFC world, Australian financial institutions cannot grow sufficiently to meet investor expectations without the support of offshore markets, particularly in the Asia Pacific region. This insight is reflected in the Government’s recent Asian Century white paper.

As companies consider the optimal destinations for the demand side of their business, they need to also think about where to best locate supply side functions.

This raises the question: what supply side functions are best located in Australia, and what are the sources of our national competitive advantage?

With the finance sector, the GFC has demonstrated we have some real competitive strengths. These include the strength of our banks, our financial regulatory system, our universities and our superannuation system. Given this, what jobs are best located here versus offshore?

There is no question that on face value at least, lower paid roles such as call centre and IT processing can be delivered more cheaply offshore. India and the Philippines come to mind and even our nearest neighbour, New Zealand, guarantees at least a 25-30% cost savings based on wages and overheads.

But then some strategic questions need to be asked. Can these roles be performed to a high standard offshore? Will customer satisfaction data be readily available to drive innovation? Are there hidden costs or risks from having functions offshore? What is happening to wage relativities given wages are rising faster in China and India?

Australian organisations often send offshore the functions that may not be working for them. But you cannot offshore what you cannot manage well yourself.

Organisations also need to consider that by offshoring, they may throttle their employment pipeline of younger workers. Up to half of call centre employees in Australian financial organisations are university-qualified and may likely be suited to progressing to higher level positions in the firm.

If offshoring is strategically right (not just short-term cost cutting), and the whys have been thought through, then it can work. In fact some specialist offshore firms who focus on call centre management or IT processing can offer superior services to some available in Australia or delivered in house.

Outsourcing particularly offshore requires a high level of partnering between the Australian firm and the outsourcer, and this requires the right supplier.

Proactive communication is needed with all stakeholders so as not to tarnish the brand, reputation and image of the Australian firm with customers and employees alike, and affected employees need to be given every chance to be supported and move to a different role.

But there is no question outsourcing often fails and is followed by a period of insourcing and onshoring – we are seeing this happening at present with many US and UK firms.

Many would argue that more regulation is required to stop jobs going offshore.

Australia now ranks 96th in the World Competitive Index in terms of regulatory barriers to business performance, down from a ranking in the 60’s. We also rate more poorly than we should for strategic, people and sales management.

Australia’s focus needs to be on developing high value-adding jobs. That’s why we should only regulate where necessary but educate and develop wherever possible. I am a strong advocate for the ongoing development of those in leadership positions to enable optimal strategic and people management decisions to be made.

To optimise our firms’ performance, business and government need to work collaboratively together. We need to work harder at improving in the areas of management practice, active stakeholder communication, long-term strategy, sales, marketing, innovation and creativity.

Better educated and developed leaders will ensure that the right strategic decisions are made and the right jobs stay onshore.

Rosemary Howard is the former Executive Director and Conjoint Professor of Executive Education at the Australian Graduate School of Management. This opinion piece was previously published on The Conversation under “Impact of offshoring jobs from Australian financial institutions“.