Australian businesses may be lagging behind in regional linguistics, but that doesn’t mean introducing Asia-experienced boardroom quotas is the answer, writes Talal Yassine.
One certainty for Australian companies in this ‘Asian Century’ is that their overseas counterparts will be more prepared to work hard at succeeding. How much more work local businesses will have to do to just match the high calibre of individuals working in Asia was brought home to me during a recent trip to Beijing.
My counterparts greeted me in fluent English, yet when it got to the pointy end of the meeting, they insisted on conducting the transaction in Mandarin, with both sides engaging interpreters. They need not have bothered. At various times during the exchange, I watched as my Chinese business partners stopped to translate for the translators. It turned out they spoke better English than those formally hired to do the job.
Australians seeking to take advantage of the explosion in business opportunities in Asian markets will need to take the time to learn more about Asia, because doing business in the region is never just about getting quickly to the end game – making money. While Asian colleagues find it easy to name our Prime Minister, capital cities and major sports, many Australians introducing themselves to the market would struggle to answer even the most basic of questions: Who is the Premier of China? What is the most popular sport in Indonesia?
The Federal Government has been rightly highlighting the importance of greater business engagement with Asia. Indeed, its recently released Asian Century white paper has been described as a ‘roadmap’ to guide Australia to become more prosperous and fully part of the region.
The white paper also includes a new twist on the idea of quotas. When the topic of imposing quotas arises, it usually involves women in the workplace and their low level of representation in parliaments and on company boards. However, the white paper recommends a mandatory quota requiring one-third of board members of Australia’s top publicly-listed companies to have ‘deep experience’ in Asia.
While there is a strong case for having Asia-capable leaders on boards, a compulsory quota is an unrealistic mechanism by which to do so. The recommendation is too simplistic. How does one judge a person who is ‘deeply experienced in Asia’? Must they have travelled to Asia or only done business within an Asian market? Do they have to speak an Asian language? What if a business is unable to meet the quota? Will they be publicly named and shamed?
Additionally, the region consists of diverse markets with various political and legal systems, cultures and levels of economic development, which begs the question: which part of Asia do these individuals have to possess a deep knowledge of? China? India? Indonesia?
Experienced company directors know better than governments when and where to get advice and how many Asia-experienced individuals they need. Abiding by a doctrinaire quota may well result in tokenism. As well, one-third is a large number to fill and is arguably unachievable. There is a risk that standards would be lowered to fill quotas if there is an insufficient supply of individuals with Asian experience who are a good company match.
Most Australian companies already recognise the importance of Asia-experienced executives, with 74 per cent of businesses indicating in an Asialink survey that future prospects for success would lie in Asia. This demonstrates that many companies are aware of both the business potential of such markets and the need for Asia-capabilities to exploit them. And with the promise of larger profits, companies will need to put in the time and resources to hire such individuals because it is becoming increasingly clear that any gaps in Asia-related experience will hinder opportunities for success.
The introduction of a two-way mentoring project to develop expertise, for example, would strengthen ties between Australian and Asian businesses. The Government should also consider helping Australians develop more people-to-people connections in the arts, culture and sports spheres. Football is one of the most popular sports in Indonesia, so perhaps an annual Australia-Indonesia soccer match, rotating between the two countries, could be introduced to bring more people together.
If my recent trip to Asia confirmed anything, however, it is that the Chinese are not waiting around for their government, or for anyone for that matter, to teach them new strategies about how to conduct business relationships.