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The next big deal is on.Property industry, whereare you on gender diversity?

In 2014, EY conducted in-depth interviews with 12 male and 7 female c-suite and propertyexecutives across 15 predominantly top 200 ASX listed organisations representing 100,000employees. These included Real Estate Investment Trusts (REITs), large listed property groups(owner/developers), engineering and construction companies and agents.The depth of the interviews with key leaders — supported by their HR data that indicates thegender spread across job roles as well as policies and practices — means we are able to drawreasonably sound conclusions and themes.EY thanks the Property Council of Australia who provided communication and encouragement tothe organisations and particularly c-suite executives asking them to participate in interviews andsupply data during a frenetic time of the year — reporting season. The interviews were conductedover a short six week time frame. We commend the openness and availability of these keyexecutives to provide us their time and insight.2 | The next big deal is on. Property industry, where are you on gender diversity?

Executive summaryAn industry divided and suspended at the tipping pointNew research focusing on leading Australian propertycompanies suggests the industry is divided in its views ongender diversity and consequently missing out on significantfinancial opportunities.GenderbelieversReaching the tipping point — whatneeds to change?Based on our findings, we believe the property industry is at aprecipitous tipping point: it can linger in its current status as amale-dominated industry, with a handful of women in executiveleadership positions and gender diversity policies or programs,or it can ‘tip’ — opening the flood gates to greater profits andbetter returns for investors.KnowingTipping pointUnderstandingIn other words, property organisations need to move from“we know gender diversity is important” to “we understand andembody in our attitudes and behaviours the business imperativeof gender diversity for our industry”.GenderscepticsThis report highlights the top line results demonstrating whythe industry is in its current state:1. Doubt and narrow understanding of the business drivers forgender diversity2. Failure to grasp the weight of external pressures3. Opposing perspectives on talent availability and the femaletalent vacuumConducted by EY, with the support of the Property Council ofAustralia (PCA), the research reveals an industry divided overgender diversity and lacking a coordinated approach. In adebate undermined by myths, false assumptions andunconscious bias, two opposing camps emerge: gender scepticsand gender believers. As a result, the majority of propertycompanies remain stuck at the ‘knowing’ or compliance end ofthe diversity spectrum, offering isolated policies, rather thantipping towards true ‘understanding’ or leadership.We argue that if the industry were to pursue gender diversitywith the aggressive focus it devotes to closing deals, thefinancial benefits could be substantial.4. The power of leadershipThe research also outlines the business case for change andoffers next steps to harness the substantial bottom line benefitsand cost savings that come with more inclusive and integratedgender diversity policies and behaviours.We believe gender diversity is a major opportunity forAustralia’s property industry, but it must become an investmentconcept: a driver of business success, economic growth andinvestment returns. If the industry were to pursue genderdiversity with the aggression and focus it devotes to closingdeals — and absorb just a fraction of the risk or take more of a‘leap of faith’ – the bottom line benefits could be substantial.4 | The next big deal is on. Property industry, where are you on gender diversity?

‘Smart curve’ maturity levelsLevel 1UnawareYou don’t have any specificgender diversity programsLevel 2Emerging awarenessLevel 3AwareLevel 4Active engagementLevel 5LeadershipYou are beginning torecognise that somethingshould be done to addressgender inequalityYou have some diversityprograms however they aregeneric and ad-hocGender diversity has strongexecutive sponsorship. Yourdiversity programs andinitiatives have beeninformed by data andcompany insights about yourorganisation needs andleversYou have organised anintegrated approach todiversity including: changingtactics based on lessonslearned, refining yourmetrics and continuouslyimprovingYou collect only minimalgender diversity metrics anddo so only for the purposesof WGEA and ASX CorporateGovernance CouncilrecommendationsYou respond to externalpressures such as the newguidelines, not internalrecognition that there maybe some business value ingender equityA growing number of peopleare ‘championing’ diversitybut this has not yet filtereddown to all levelsYou have clearly definedobjectives and strategies foraddressing gender inequitiesDiversity is seen as ‘businessas usual’You are aware of some ofthe arguments foraddressing gender inequalitybut don’t think it applies toyour businessYou think gender diversityissues will resolvethemselves by focusing onhiring the ‘best’ person forthe jobYou have started to identifykey performance indicatorsand collect relevant metricsYou have effectivegovernance and compliancesupported by integratedreporting against all metricsYou are a role model forothers in the market,recognised by customers asbeing truly committed todiversityYou lack access to robustmetrics around genderdiversityYour metrics are starting toimprove slightlyYour metrics are starting toconsistently improveYour strongly improvinggender equity metrics aretranslating into measurablefinancial results andbusiness benefitsSporadic gender diversity programsOne ‘smart curve’ metric for maturity is the type of genderdiversity programs in place and the level where sponsorship inan organisation is coming from. In our interviews, the majorityof participating organisations indicate they have diversityactivities, described as a designated week during the yearwhere diversity becomes an organisation-wide focus. Otherswork with universities to support mentoring and apprenticeshipprograms that target women. Others have activities andprograms to keep high achieving women who have left onmaternity leave to encourage and support them to come backto the workplace. However, overall most of the programs occursporadically and are not centralised through an industry bodyor association, nor are they integrated throughout theorganisation’s policies and procedures such as recruitment,promotion, or KPIs, to gain long-term and progressive traction.Local reporting requirements are the main driversof diversity programsAnother ‘smart curve’ metric for maturity is an organisation’sunderstanding of reporting requirements. All of ourinterviewees identified the ASX Reporting Requirements, andrecent changes to them, as critical compliance drivers. In 2014,organisations were asked to report more detailed informationsuch as the gender split across a wider range of job roles (entrylevel to CEO) and were also asked to supply more detailedinformation on policies and strategies across a wide range ofmetrics such as flexibility, remuneration, talent acquisition,recruitment and retention, KPIs, and discrimination to name afew. As this information becomes public in early 2015, ourinterviewees are well aware of its potential to throw a positiveor negative light on their organisation in the eyes ofshareholders and prospective employees.The next big deal is on. Property industry, where are you on gender diversity? |7

Doubting the business case for gender diversityYou don’t need more proof, you need a small leap of faithOur interviews revealed property executives doubt the case for gender diversity, despite15 years of respected global research that clearly indicates companies with the mostgender diverse boards and leadership teams consistently outperform their industryaverage.Business case drivers for gender diversityGenderDiversityExternaldriversTalent shortageRegulatory pressuresBrand and reputationFinancial returnsCostsYet regularly through the interview process with key executivesin property, we heard requests for more research, more proof ofthe business case, or more property specific data. We argue theindustry doesn’t need more data and that this is simply changeavoidance. The industry needs to harness its ambitious ‘can do’attitude and take a small calculated risk based on the data athand to improve its ‘smart curve’ performance.InternaldriversTalent wastageLeadership skillsPurchasing powerInnovation and creativityThere is a large body of evidence that companies with higherpercentages of women in their leadership perform betterfinancially on a wide range of business metrics — return onequity, return on sales and return on invested capital.A study of 160 REITs, found that those with atleast one woman on their board for more thanthree years tended to produce annual totalshareholder return growth rates that were2.6 percentage points higher than their peersduring the three-year period, 3.6 percentagepoints higher over a five-year period and 3.4percentage points higher in the course of10 years. 5For example, EY’s June 2014 Point of View 2 summarisesrecently released reports including a study published byThomson Reuters in 2013, which analysed levels of boardgender diversity at 4,100 public companies around the world aswell as their performance since 2008. The authors found astrong correlation between mixed boards and better return 3 .A report from Credit Suisse 4 from September 2014, based onan analysis of 2,360 companies worldwide, found that between2005 and 2011, companies with at least some female boardrepresentation outperformed those with no women on the boardin terms of share price performance. The average return onequity (ROE) for companies with at least one woman on theboard over the six year period was 16%, four percentage pointshigher than that of companies with no women on theirboards (12%).2 http://www.ey.com/Publication/vwLUAssets/ey-women-on-boards-povjuly2014/$FILE/ey-women-on-boards-pov-july2014.pdf3 Mining the metrics of board diversity, Thomas Reuters, June 2013,Andre’ Chamavat and Katharine Ramsden4 The CS Gender 3000: Women in Senior Management, Credit Suisse,September 20145 Ferguson Partners Limited, 2012 http://www.reit.com/news/articles/survey-reveals-reits-shifting-mindset-governance8 | The next big deal is on. Property industry, where are you on gender diversity?

Knowing versus understandingbusiness driversMany property executives demonstrated a fairly narrowunderstanding of the business case for gender diversity, seeingit essentially as getting access to the other “50% of the talentpool”. Very few could articulate the well-accepted financialbenefits being pursued by other industries.More than half of the executives interviewed said theyunderstood the business case for gender diversity, but believed‘it hasn’t affected our industry yet’. This is not the point. Thebusiness case for gender diversity is not necessarily aboutfixing a problem — it’s about ensuring business sustainabilityand improving financial performance.The business case for women in leadership gets better everyyear: women bring improved decision making at the top, morecreativity and innovation, and better problem solving, stemmingfrom greater cognitive diversity. Women also improve theecosystem, because company leaders better match the profileof customers and employees. And when three or more womenmake it to the top team, a company’s organisational healthappears to improve on every one of the nine dimensionsMcKinsey tracks. 6Other interviewees recognised the business opportunities, butthought that what they were doing was enough. This was oftenamplified by the argument that they had good intentions or are’supporters of women’.6 Can women fix capitalism?, McKinsey Quarterly, September 2014,Joanna BarshThe next big deal is on. Property industry, where are you on gender diversity? |9

Failure to grasp the weightof external pressuresThe property industry has yet to grasp the true weight of externalpressures motivating other industries to harness gender diversity.And while there are clearly some differences between residentialand commercial sectors, external pressures though slightly varied,are clearly relevant to both. Some of these include:• Brand and reputation• Institutional investors• Skills shortagesBrand and reputationBy 2028, women are forecast to control close to 75% ofdiscretionary spending worldwide 7 . The property industry maystill believe its client base is male-dominated, but researchshows that women are becoming increasingly influential acrossa wide range of categories. Women are increasingly highlyinfluential. For example, in retail and residential propertypurchasing decisions, women are more likely to promote ordetract from a brand through their social networks 8 . Yet,although most participating organisations make sure theirmarketing and sales teams have the skills to connect withfemale customers, few thought that women having a greaterimpact on buying decisions was a reason to addressgender diversity.Customers are definitely becoming more feminine and moreAsian. It’s funny because investors never ask me — bar one —about diversity in our organisation. But there is no doubt thatcustomers have changed. Homes are a family decision and thewife has a major voice in the decision. We are also finding thaton social media women are particularly involved and linkedinto our posts. (Source: c-suite executive, large propertyowner/developer).Institutional investorsFor the commercial sector in particular, a 2014 report ongender balance by international proxy advisory firmInstitutional Shareholder Services notes that institutionalinvestors are calling for greater gender diversity, which appearsto be influencing director nominations globally 9 .7 The Third Billion, EY, 2011.8 What Women Want, Boston Consulting, 2012.9 Governance Institute of Australia, 7 October 2014, http://www.governanceinstitute.com.au/news-media/news/2014/10/boardroom-gender-balance/Property companies may not be feeling investor pressure yet,but it’s only a matter of time before they are required to answergender diversity challenges from institutional investors.Gender diversity fundsOne of the first funds to focus on investing in companieswith a high number of women in senior roles was TheWomen’s Leadership Fund, started by Zürich-basedNaissance Capital. Launched by Cherie Blair, the fund isan example of growing interest in gender diversity incompanies and is based on studies suggestingbusinesses with a higher proportion of women in seniorpositions perform better.The PAX World Global Women’s Equality Fund 10 (theWomen’s Equality Fund) is another fund that looks toinvest in companies that take affirmative steps toattract, retain and promote women, and to advancegender equality and women’s empowerment in theworkplace and beyond. Specifically, the Women’sEquality Fund seeks to invest in companies that promotegender equality through internal policies and programs,transparency regarding the effectiveness of thosepolicies and programs and accountability amongemployees to assure implementation and observance ofthose policies and programs.In partnership with the United National DevelopmentFund for Women (UNIFEM), Calvert launched the CalvertWomen’s Principles® 11 , the First Global Code ofCorporate Conduct focused exclusively on empowering,advancing, and investing in women worldwide. As theleading asset manager using sustainability to driveshareholder value, Calvert Investments identifies thosecompanies who are focused on long-term, sustainablegrowth and value. At Calvert, including women withinthe investment framework is an integral part of theirstrategy and incorporates:• Including gender diversity as a critical ingredient ofcorporate valuation• Using shareholder voice to push companies to thinkdifferently about women• Providing global thought leadership on investmenttopics that matter to women10 http://www.ft.com/cms/s/0/ada6d18c-c1ce-11de-b86b-00144feab49a.html#axzz3E7WphcAX11 http://www.calvert.com/womensPrinciples.html10 | The next big deal is on. Property industry, where are you on gender diversity?

Skills shortagesAlthough many participating organisations agree it is difficult tofill some engineering and construction positions, most believethe war on talent has not yet affected the industry. Talentedwomen are entering the industry from university, with graduateentry level roles having 30-50% female representation. This is inline with university evidence which also shows that a greatermajority of women graduate and many do so at the top oftheir class. 12Future skill shortage estimations (Australia)Participation rate66%64%62%60%58%56%Participation ratewith ageingSource: Australian Productivity CommissionParticipation ratewithout ageingAgeingeffect2004 2009 2014 2019 2024 2029 2034 2039 2044However, property’s talent supply is being impacted by a seriesof negative drivers. Participating organisations referred todrivers such as an ageing workforce and aspirations of work/lifebalance (by women who chose to have children and not returndue to long and demanding work hours and the aggressivenature of the work) were affecting employee retention rates.The universities we spoke to feel they were doing everythingthey can to attract more women into the industry. They feel theindustry needs to target younger children pre-high school tohave an impact.Case study: How Google is grapplingwith skills shortagesConsidered by many to be a top innovator, 2014Google announced that only 17% of its techemployees are women. The gender disparity is adire issue for all tech companies. There will be 1.4million computing jobs available in 2020, but only400,000 computer-science graduates from U.S.universities to fill them. Part of the problem is thatonly 12% of computer-science degrees go towomen, and in order for Silicon Valley to surviveand thrive, it must be able to recruit moreengineering talent from the other 40% of thepopulation. Realising the extent of the problem,Google is launching Made With Code, a website thatincludes coding projects, stories from femaletechnology role models and resources for parents.Google has invested a lot more than just money inthe project. The company conducted research todetermine why girls are opting out of learning howto code: the number of female computer-sciencemajors has dropped dramatically since 1984, when37% of computer-science degrees went to women.How will Google get them back into computerscienceclassrooms?Google found that most girls decide before theyeven enter college whether they want to learn tocode — so the tech world must win them over at ayoung age. They also found that there were fourmajor factors that determined whether girls optedinto computer science: social encouragement,self-perception, academic exposure and careerperception. 13As skills shortages become more acute with Australia’s ageingpopulation, smart property companies will start tapping moreeffectively into this important resource.13 Google Invests $50 Million to Close the Tech Gender Gap,http://time.com/2901899/google-made-with-code-girls-intech/#2901899/google-made-with-code-girls-in-tech/June 19, 2014.12 Based on conversations with leading Australian universities offeringa Bachelor degree in Property Economics or equivalentThe next big deal is on. Property industry, where are you on gender diversity? |11

Construction/engineering — cansafety standards be a springboardto greater inclusion?A number of stakeholders we interviewed saw anopportunity for creating more inclusive workplacesthrough the focus on safety cultures in constructionand on work sites. The change in the way peoplework on sites to ensure a safe and respectfulworkplace has increased the level of professionalismon sites and stakeholders believe this has made themmore open to supporting diversity. These behaviouralchanges are paving the way to creating a respectfulculture where other peoples’ comfort and safetybecame the concern of all individuals. Whilst there isstill an acknowledged unconscious bias on sites, anumber of stakeholders felt the ‘hook’ of safety wasa great opportunity for the industry to go the nextstep to creating inclusive workplaces.Our culture is caring and inclusive…our lessaggressive style is appreciated by our clients.We win business because of it. The focus on safetyhas changed the nature of the business. Theconstruction industry has done well to changebehaviours to improve its safety record soprofessional behaviour is now an expectation.Women face exclusion without it being deliberatebecause the majority of people working inconstruction are still usually men.(Source: c-suite executive, construction/engineering)Particularly in construction, female workers justaren’t coming through. There’s no gene pool, none inthe pipelines. Every year we take on a handful ofgraduates and we ensure that there is a 50/50 splitof men and women, but it’s tough and the womendrop off. We try to engage with Universities and theACA to build up the gene pool. It is a struggle.(Source: c-suite executive, construction/engineering).Opposing perspectives on talentavailability enhance a femaletalent vacuumOur research found a vacuum in the female leadership pipeline inparticipating organisations: women come in strongly at entryleveland administrative positions, but then drop off dramaticallyas they move up the ladder. This is sometimes referred to as the‘stupid curve’ — a terms coined over 10 years ago describing the‘stupid wastage’ when women fail to climb to senior levels in anorganisation.The female leadership pipeline vacuumWhen we look at the HR data from participating organisationsand compare the gender spread of managers to non-managers,it is clear that positions of authority are far more likely to bemale. The spread of gender across CEO roles is dominated bymen, with less than 10% occupied by women. Men also dominatemanagement roles and above, with women occupyingapproximately only 25% of management positions. The spread iscloser to 50/50 when looking at roles below manager.Gender spread comparison across management andexecutive roles versus non-management roles fromparticipating organisations100%90%80%70%60%50%40%30%20%10%0%CEO/Headof businessManagersand aboveManagersand belowTotal maleTotal female12 | The next big deal is on. Property industry, where are you on gender diversity?

In analysing where women currently fall in job roles across theThe data tells us that, although the HR data from participating14 As described by Chief Executive Women http://www.cew.org.au/ they will continue to leave.organisations indicates that policies and strategies for genderdiversity are being put into place, they do not yet appear to beparticipating organisations, it is clear that men dominateleadership pathways.translating to actual diversity outcomes for most organisations.No one in the industry disputes the lack of femaleFor example, when executive pipeline roles which lead torepresentation at leadership levels, but opinions are sharplypositions of leadership are mapped it is clear a leadershipdivided as to why it occurs. Research found the majoritypipeline vacuum for women in property exists: women drop offviewpoint attributes the figures to the lack of qualified womenthe career pipeline at a number of key career progression hotto choose from, or because talented women opt out once theyspots, all the way from professional through to manager, seniorhave children. Some organisations are cautious about hiringmanager and c-suite roles. Yet women occupy the vast majorityoutside the industry. A small minority put it down to theof administrative or “pink collar” roles 14 .industry’s lack of commitment to actively look for and recruitBar graph percentage of men/women across executive pipelinejob roles versus non-executive from 2014 reporting figurestalented women from outside of property, as well as to supportthem throughout their careers.100%Total male90%80%70%60%50%40%Total femaleWe currently have a target to have 45% of our managementroles filled by women by 2017. We are currently at 32%. To dothis we are recruiting outside of property for senior roles.You really need to push it. We ask men to find femalecandidates for consideration. (Source: c-suite executive, REIT)30%20%10%0%0%Total maleTotal femaleProperty is very specialised. We have tried to look outside,but have found it risky and detrimental. (Source: c-suiteexecutive, Agent)And while there was awareness about moving women intomanagement roles, this does not mean segregating women tosupport roles rather than operational roles, or those that leadto top leadership positions.Of huge concern, in property companies, the fall-off in femalerepresentation starts before women start their families.Experience in other industries suggests this is because youngerwomen see the writing on the wall. Looking at the femalecareer path above them, where even senior women are typicallyin support roles, many young women deliberately move toorganisations or other industries in search of companies wherethey can see senior women in leadership and operational roles.Alternatively, a number of female participants in property toldus they perceived motherhood as career stalling and chose to‘hold out’ until their late 30s to have children, so they can getahead beforehand. Until these women have confidence in theiremployer’s ability to offer them genuine career progression,100%90%80%70%60%50%40%30%20%10%Technicialand tradeCEO/headof businessCommunity andpersonal serviceManagementpersonnelClerical andadministriveOther executive/generalSalesSeniormanagersOthermanagersMachineryoperatorsand driversLabourersProfessionalsOtheremplyeesThe next big deal is on. Property industry, where are you on gender diversity? |13

“Offering” and “encouraging” flexibilityare two different thingsBased on our experience in other industries, part of the reasoncomes down to job design. Although many property companieshave flexible work policies, job sharing opportunities, evenon-site childcare, their HR data shows that full-time, leadershipand operational positions favour men and that part-time,support roles favour women.The flexibility mythEY’s Australian Productivity Pulse researchsuggests women in flexible roles (part-time,contract or casual) appear to be the mostproductive members of our workforce. Womenin flexible roles waste only 11.1% of time in atypical working day, compared to an average of14.5% for the rest of the working population.Given 43.2% of women in the workforce workpart-time, compared to 13.5% of men 15 , thistranslates into an important productivity bonusthat few employers recognise.Thanks to more productive flexible workers,Pulse found that collectively Australian andNew Zealand workers could save at least $1.4billion on wasted wages by employing moreproductive female employees in flexible roles.In an average year, these women effectivelydeliver an extra week and a half of productivework, simply by using their time more wisely. 16In terms of property specifically this appears to be the case. Welooked at the Executive management team of the participants inthe study. There were 195 roles in total, 37 of these held bywomen; two were CEO/MD, eleven were on the path toleadership in operational/line roles and 24 were in support/staffroles such as HR, legal, company secretary and corporate affairs.In other words, men dominate the leadership pipeline and evensenior women tend to be in support roles such as HR, legal orcorporate affairs. Asked why this is so, participatingorganisations cited women: wanting more work/life balance,doubting their skills and ability to thrive should they return towork after having children, or choosing to be a primary carer.Executives said their companies were grappling with ways to tryand attract women back to work once they had children.Ambitious young men are increasingly married to ambitiousyoung women, and both halves of the couple are starting to findfocusing a career management time-frame on their 30’s asbeing problematic. Parents need to be parents, and companieswho are managing their Talent effectively and who are buildingfor the future, must accept that both women and men willprobably need to be given some flexibility during this time inorder to cope with their significant family responsibilities. In noway should this mean that they are disqualified fromconsideration for future leadership. 17All of the participating organisations interviewed stated thatthey had flexibility policies and could identify a number of staffunder these types of arrangement. This is supported by the HRdata provided by participating organisations (Figure 10)showing the majority have flexible work policies, job sharingopportunities, and leave opportunities. Some organisations alsonoted in the HR data their excellent on-site childcare facilitiesand other features.15 ABS, Jan 2012 Cat: 4125.0, Gender Indicators Australia16 Untapped opportunity — The role of women in unlockingAustralia’s productivity potential, EY, July 201317 How Women Mean Business: A Step by Step Guide to Profiting from GenderBalanced Business, Avivah Wittenberg-Cox, 2010. John Wiley & Sons Ltd.14 | The next big deal is on. Property industry, where are you on gender diversity?

Flexibility policiesFlexiblework hoursCompressedworking hoursTime in lieuTelcommutingPart time workJob sharingCareer’s leavePurchased leaveUnpaid leave01512101815192915 14 15 15 15 14 157 7 7 7 7 7 7 74 16 4 15 4 16 4 1615 12 15 12 15 12 15461018 4 18 4 18 45 14 4 15 4 15 41 1 11017 9 16 8 17 8 17 810 20 30 40 50 60 70 80 90 100 110 120 130Managers (female/formal)Managers (female/informal)Managers (male/formal)Managers (male/informal)18 5 19 5 19 5Non-Managers (female/formal)Non-Managers (female/informal)Non-Managers (male/formal)Non-Managers (male/informal)However, having flexibility policies is not enough. Propertyorganisations also need to truly support and encourageflexibility. Our interviews revealed widely varying attitudestowards flexible arrangements and having the opportunity foradvancement — particularly in executive level roles. There wereopposing viewpoints as to how suitable flexibility arrangementswere for executive leadership roles. There also seemed to begreater acceptance that flexibility was suited to head officeroles but less so for site roles.I think this idea that women who return from maternity leavesomehow come back with “less experience” or are lesscompetitive for promotional opportunities is completenonsense! When men leave because they are ill or need asabbatical, this never counts against them. We identify highperforming women in our pipeline and for those who decide togo on maternity leave, I try to promote them before they go onleave or as they are coming back, and we also assign them amentor to assist with the transition. (Source: c-suite executive,large property owner/developer)This is supported by the HR data supplied by participatingorganisations. Men dominate full time positions while womenare far more likely to occupy part-time roles. Although the datasupplied by participating organisations does not indicate whichof those in part-time roles are on a flexibility arrangement, itdoes indicate that women are at a disadvantage when it comesto executive pipeline roles due to the current job design whichfavours full-time and executive roles.Men dominate full-time permanent positions of powerregardless of job role100%90%80%70%60%50%40%Full-time permanent maleFull-time permanent femalePart-time malePart-time femaleContractor/casual maleContractor/casual female30%To get ahead you need to work hard and put in long hours. Thisis fine until women have families and then things need to behandled differently for women. Women who come back to workafter having a family need to make sure they don’t cut corners.They need to make sure they don’t just ‘get the work done’ thengo. (Source: c-suite executive, large property owner/developer)20%10%0%100%90%CEO/Headof businessManagersand aboveManagersand belowMaleFemale80%70%60%50%40%30%20%10%0%Part-timeFull-timeThe next big deal is on. Property industry, where are you on gender diversity? |15

The power of leadershipThe single defining characteristic of participating propertycompanies further up the ‘smart curve’ was the quality of theirleadership. The (male and female) CEOs of these organisations,had a direct hand in ensuring that any barriers were beingaddressed, and were able to “sell” the gender diversity messageas well as link it to KPIs. They understood and were convincedby the research supporting the business case and could identifyparticular research or conversations that had motivated themto creating a diverse workforce.I actually went through salary levels of each job role and wherethere was a differentiation between a man and women in thesame job level/role, I increased the salary of the woman toequal that of the man. (Source: c-suite executive, large propertyowner/developer)As a result, the diversity at the executive levels of theseorganisations was particularly strong, with 30% representationof women at the board level and a good pipeline forleadership roles.These companies are leading the way. The majority ofparticipants noted that, in the last few years, the leadershipstyle and culture of their organisations have changed, movingto flatter structures, KPIs, performance metrics and activitybasedwork spaces. Research shows that these types ofstrategies and structures help to support greater genderdiversity in organisations, offering transparent, fair and equalcareer progression opportunities, and creating a more inclusivework environment.Demonstrated gender diversity through the levels at twoleading organisations100%90%80%70%60%50%40%30%20%10%0%CEOKeymanagementpersonnelOtherexecsGMSeniormanagersOthermanagersTotal maleTotal femaleAt the same time, there are a growing number of women insenior positions as well as on boards in property. Whenaggregated, each sector of property currently has femalerepresentation, although still below the 30% representationresearch indicates is required to provide a tipping point for thebenefits of gender diversity.Board and chair gender representation based on HR datasupplied by participating organisations (aggregate)80%70%60%50%40%30%20%10%Total maleTotal female0%REITSLarge Construction/property engineeringdevelopers/ownersAgents16 | The next big deal is on. Property industry, where are you on gender diversity?

Gender diversity on boards can haveprofound advantagesResearch suggests that gender diversity on corporate boards can havepronounced advantages.Ferguson Partners Ltd., a global executive recruiting consultant, and FPLAssociates, a management/executive corporation consultancy, analysed therelationship between REITs’ performance and a wide range of characteristicsrelated to their boards of directors. The results of the study indicate thatcompanies that have had a female board member for at least three years or moretend to experience higher total shareholder returns than those that have not.In addition to gender, the study looked at factors such as board size, frequency ofmeetings and compensation levels. The study found that of the approximately 160REITs, those that have had a female on their board for more than three yearstended to produce annual total shareholder return growth rates that were 2.6percentage points higher than their peers during the three-year period, 3.6percentage points higher over a five-year time period and 3.4 percentage pointshigher in the course of 10 years.While the underlying cause or causes is open to interpretation, the authors noted that some may argue that theaddition of a female perspective in board activities lends a valuable contrast to that of male counterparts.They say it may be that varied perspective that ultimately results in better performance.The findings correlate to other similar research conducted across diverse industries and organisations.The lack of female representation could be attributed to the lownumber of organisations having set gender diversity targets fortheir boards.For any governing boards or bodies where gender diversitytargets have not been set, the reason why based onparticipating organisation HR data1 5 2 1 80 10 20 30 40 50Governing body has gender balance (e.g. 40% women/40%, men/20%,either)Currently under developmentInsufficient human resources staffDon’t have expertiseDon’t have control over board appointments (provide details why)Not a priorityOtherThe next big deal is on. Property industry, where are you on gender diversity? |17

How property can reach the tipping pointA lack of coordination, genuine understanding and trust of the business case for genderdiversity is hampering property’s progress up the ‘smart curve’.This is preventing property from reaching a tipping point — thelevel at which the momentum for change becomes unstoppable.If the industry were to pursue gender diversity with theaggression and focus it devotes to closing deals — and absorb justa fraction of the risk or take more of a ‘leap of faith‘ — thebenefits could be substantial.We believe gender diversity is a major opportunity forAustralia’s property industry, but it must become an investmentconcept: a driver of business success, economic growthand investment returns. In our view, companies that movefurther up the ‘smart curve’ will improve their financialperformance — while also creating a modern culture with theflexibility and innovation that younger generations of bothgenders are demanding.The property industry needs to accept what the research issaying — that all industries will benefit from gender diversity— and proactively address this issue, before its customers,shareholders and employees find the property industrywanting.The industry’s next step should be todevelop a coordinated approachDiversity is a strategy, not an issue. Diversity is not about doingthe right thing; it’s about honing a competitive weapon. Tobenefit, property needs to mobilise its historical strengths ofaggressive competition and can-do attitude to develop acommon understanding and approach around the business caseat an industry level.How can property companies movefurther up the ‘smart curve’?The research cited in this report focused on identifying wherethe industry currently stands in the diversity debate andmaturity curve. The following checklist is based on EY’s globalexperience of moving companies up the ‘smart curve’ in allindustries. We recommend individual property companies usingthis as a basis for identifying appropriate next steps.AreaLeadershipcommitmentTalent identificationand managementCultureRecruitmentpracticesPromotional policiesGender targetsCareer pathmanagementUnconscious biasRemunerationOrganisationaIstructureChange managementGender diversity best practiceOur leaders consistently communicate: “This is a business imperative.” They call out inappropriate behavioursand attitudes that undermine the goal of gender diversity. Accountability is embedded into the performancetargets of every leader.We proactively source, seek out and encourage future female leaders, including those who work flexibly. Weunderstand the risks of missed opportunities and unnecessary costs associated with exclusive and outdatedtalent management processes.Our company respects people who also undertake family and community work. We value contribution andachievement, over face time and appearances.We have at least one woman on the decision panel and at least one woman in the pool of candidates. We lookfurther afield for quality candidates and have the courage to take a risk on a non-traditional candidate.We ensure that anyone with the right skills and commitment, even if they work part-time or flexi-time, has theopportunity to progress. Our policies include work/life balance initiatives such as working flexibly and remotelyand job sharing.We have gender targets to regularly measure progress made and to refocus efforts when progress has stalled.Everyone from the CEO to junior managers has gender hiring and pay targets, which are taken into account atremuneration time.We take a long-term view of an employee’s potential contribution and support the re-entry of high-qualityemployees to retain them for the longer term.We are aware of the impact of unconscious bias. We talk about, measure it and put in place systems andprocesses to minimise it.We remunerate in line with capability, not gender.Our organisational structure is aligned to our strategic goals underpinning our commitment to gender diversity.We have adequate change management practices in place, geared to execute on the opportunities to reach theTipping Point.Achieved?Yes No18 | The next big deal is on. Property industry, where are you on gender diversity?

DefinitionsDiversity — The collective mixture of differences and similarities thatincludes, for example, individual and organisational characteristics, values,beliefs, experiences, backgrounds, preferences, behaviours.Inclusion — The achievement of a work environment in which all individualsare treated fairly and respectfully, have equal access to opportunities andresources and can contribute fully to the organisation’s success.Gender Diversity — Does not necessarily mean numerical equality. Instead,it means a conscious analysis of the gender mix that reflects the availabletalent pool and sustainably supports strategic goals. The goal does notnecessarily have to be 50/50 but should be closer to 50/50 thanto 85/15.Gender Bilingual — Organisations that have developed the managementcompetencies to understand the differences between men and women sothat they are able to effectively connect, and communicate with 100percent of potential customers, end-users, and stakeholders. They are alsoskilled at being able to attract, retain, and develop 100 percent of theavailable talent pool.Tipping Point — The level at which the momentum for change becomesunstoppable. The concept is based on The Tipping Point: How Little ThingsCan Make a Big Difference, Malcolm Gladwell, 2000.The next big deal is on. Property industry, where are you on gender diversity? |19

Our approachThe research set out to answer the following questions:• What is the current state of gender diversity in the Australian property sector?• How do a sample of primarily 200 ASX listed property organisations that make up the sector rate in terms ofattitudes, behaviours, policies and statistics relevant to gender diversity?• How does this compare to Australian and world-wide research?• Is there a case for change?• What are strengths, threats and opportunities for property going forward?Literature research — We scanned our existing EY research aswell as national and international literature for key themes andapproaches for improving gender diversity.Qualitative research — We met with leaders from propertyorganisations in Australia and interviewed them in depth. Ourfocus was on CEOs, CFOs and other c-suite and executives fromkey areas of the business as research overwhelmingly agreesthat improving gender diversity must start at the top oforganisations. The semi-structured interview questions weredeveloped based on 8 key indicators that are predictors forgender diversity, based on a summary of the literature research.These include:1. Knowledge and understanding — of some gender diversitybest practice principles as well as the business case forgender diversity2. Leadership and accountability — More than just “knowing”;doing and selling the message of gender diversity andmaking sure staff at all levels have KPIs when it comesto diversity3. Attitudes and beliefs (culture) — historical underpinningsthat support or inhibit genderQuantitative research — We analysed human resources datasupplied by participating property organisations, based on2014 WGEA reporting requirements. 18 The information wasused to determine:• Gender composition of each organisation’s workforce and anydifferences amongst sectors (for example, agents ascompared to REITs)• Gender composition of governing bodies and boards• Flexible working arrangements for employees• Other policies and practices that address and/or supportgender diversity• Correlations and/or discrepancies between interviewsand dataAdditional key stakeholder interviews — we also interviewedHR and recruitment companies that focus on the propertysector as well as university departments that offer relevantproperty degrees to gain insights into factors that can affectgender diversity in the workplace such as skills shortages andthe pipeline of female graduates and job candidates.4. External pressures — from policies, legislation, customers,staff or community that have affected the way anorganisation approaches at diversity5. Flexibility policies and practices — such as childcare andpaid parental leave that support women in the workplace6. Recruitment and promotion practices (and metrics) —that are fair and equitable and look broadly at skills andexperience that transfer across industries to attract thelargest talent pool7. Education and training — that creates gender bilingual staff,managers and executives8. Marketing and sales strategies — that reflect genderbilingual approaches and reach out to female consumers18 All 15 organisation’s interviewed provided HR data as well as five additionalorganisations. It was optional for organisations to respond to each and everyquestion asked of them.20 | The next big deal is on. Property industry, where are you on gender diversity?

SampleWe conducted 19 in-depth interviews (12 men, 7 women) representing c-suite and otherproperty executives across 15 organisations with predominantly Top 200 ASX listedorganisations. These 15 organisations represent over 100,000 Australian employees.Four main types of organisations were represented.• Real Estate Investment Trusts (REITs) — 5 in total• Large listed property groups (owner/developers) — 4 in total• Engineering and construction — 3 in total• Agents — 3 in totalThe depth of the interviews with key leaders — supported by HRdata that indicates the gender spread across job roles as well aspolicies and practices — means we are able to draw reasonablysound conclusions and themes.Figure 1: Face to face interview — job title representation andgender split108Total femaleTotal male6420CEO/MD CFO/CIO Head of Executivekey business HR RoleareasThe research findings were anonymised to protect the identitiesof the individuals and their organisations. The data was alsoaggregated to ensure confidentiality.The next big deal is on. Property industry, where are you on gender diversity? |21

Women in leadership — Further insightsThe male perspective on gender diversityEngaging Australian businessWhat will it take to get Australia on target?How smart are you?Additional resourcesInterested in learning more about gender diversity and how you can improve businessperformance? Here is a list of EY thought leadership pieces:In their own wordsIn his own wordsWomen in Leadership — In their own words — Furtherinsightshttp://www.ey.com/AU/en/About-us/Our-people-and-culture/Diversity-andinclusiveness/EY-In-their-own-wordsWomen in Leadership — In his own wordshttp://www.ey.com/AU/en/About-us/Our-people-and-culture/Diversity-andinclusiveness/EY-women-in-leadership-report-in-his-own-wordsIn their own wordsWomen in leadershipWomen in Leadership — In their own wordshttp://www.ey.com/Publication/vwLUAssets/Women_in_leadership._In_their_own_words/$FILE/women_in_leadership_report_2013.pdfWomen in leadershipWomen in leadershipWomen in Leadership — What will it take to get Australia ontarget?http://www.ey.com/Publication/vwLUAssets/Women_in_leadership._What_will_it_take_to_get_Australia_on_target/$FILE/What_will_it_take_to_get_Australia_on_target.pdfWomen in Leadership — How smart are you?http://www.ey.com/Publication/vwLUAssets/Women_in_leadership._How_smart_are_you/$FILE/Women_in_leadership_Nov2010.pdfWomen in leadershipWomen in Leadership — Engaging Australian businesshttp://www.ey.com/Publication/vwLUAssets/Women_in_leadership._Engaging_Australian_business/$FILE/WomeninLeadership.pdf22 | The next big deal is on. Property industry, where are you on gender diversity?

EY | Assurance | Tax | Transactions | AdvisoryAbout EYEY is a global leader in assurance, tax, transaction and advisoryservices. The insights and quality services we deliver help build trustand confidence in the capital markets and in economies the worldover. We develop outstanding leaders who team to deliver on ourpromises to all of our stakeholders. In so doing, we play a criticalrole in building a better working world for our people, for ourclients and for our communities.EY refers to the global organisation, and may refer to one or more,of the member firms of Ernst & Young Global Limited, each of whichis a separate legal entity. Ernst & Young Global Limited, a UK companylimited by guarantee, does not provide services to clients. For moreinformation about our organisation, please visit ey.com.© 2014 Ernst & Young, Australia.All Rights Reserved.APAC no. AU00002119M1427232ED NoneThis communication provides general information which is current at the time of production.The information contained in this communication does not constitute advice and should not berelied on as such. Professional advice should be sought prior to any action being taken inreliance on any of the information. Ernst & Young disclaims all responsibility and liability(including, without limitation, for any direct or indirect or consequential costs, loss or damageor loss of profits) arising from anything done or omitted to be done by any party in reliance,whether wholly or partially, on any of the information. Any party that relies on the informationdoes so at its own risk. Liability limited by a scheme approved under Professional StandardsLegislation.ey.com

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