The July 2023 PJC report into corporate insolvency[1] makes recommendations on the “problem” of the limited female representation among liquidators, around 10%, noting that “there are clearly broader cultural or systemic factors at play [which] must be reflected on and addressed”.
One broader recommendation, not necessarily focused on gender, is to reduce the 4,000 hours experience requirements for registration as a liquidator. As I earlier explained in The gender gap in insolvency – Murrays Legal, this compares with 600 hours in the UK and 1-2,000 hours in New Zealand. The high number of hours perhaps reflects Australia’s stricter regulatory approach generally but might also be seen as an example of an undue barrier to entry into a professional group: see Anti-competitive conduct in the insolvency industry? – Murrays Legal.
My earlier comment also has other, lateral, suggestions.
Gender is but one issue in diversity. Qualifications and experience criteria are quite narrow in insolvency, and broadening these might consequentially improve gender equity. At present, the entry point to the accounting bodies in Australia requires an accounting degree, compared for example with the UK’s ICAEW, where “you don’t have to study accountancy, business or finance at university to start the ACA, because companies offering ACA training agreements are interested in graduates from a range of backgrounds”.[2] These local criteria might be broadened to include those trained in law, management, economics and more; the common BBus/Com/Econ/MBA-LLB/JD combination might offer a broader range of skills, and gender.
The composition of registration committees might need to be broadened, and cross-country comparisons and approaches are also useful. New Zealand is reported as having over 18% female liquidators.[3]
Then there is the serious examination of the issue by academics, including as to why gender matters, with some suggestions that gender affects the approaches taken by an IP to a failing company, and that women on boards offer some protection against insolvent trading. Any approach needs to take account of what may be seen as unintended findings.
As to that, some deeper analysis of the “problem” would assist, how to address it, and with some rigor and objectivity in approach. For example, QUT offers an academic research project QUT – The gender profile of the insolvency profession, referring to ‘gendered occupational niches’, isolating influences or barriers to entry for one gender or the other, and to the key determinants to effective performance of the IP’s role and whether any systemic biases then become barriers to entry.
Other relevant diversity criteria needing attention involve age, overseas qualifications, and alternative experience backgrounds.
How relevant diversity is to the actual conduct and outcomes in insolvency is perhaps too hard to assess. As I say, perhaps we should just cut through all this and go back to the fact that only around 10% of liquidators are women,[4] with trustees a bit higher, and accept that ‘something should be done about it’?
The government’s response, and that of the industry, to the PJC recommendations, is awaited.
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[1] https://www.aph.gov.au/Parliamentary_Business/Committees/Joint/Corporations_and_Financial_Services/CorporateInsolvency/Report
[2] Training as a graduate | Find your route | ICAEW Careers
[3] Where are the women in insolvency? | Acuity (acuitymag.com)
[4] The gender gap among Australian liquidators, (2022) 22(3&4) INSLB Paulina Fishman
One Response
Superb! Great thoughts! Food for comparative researchers like me, thanks, Micheal.
Preeti