Addressing gender inequality in the insolvency sector

Gender equality is increasingly under the spotlight with organisations encouraged to address any imbalances that exist within their industries, including in the insolvency sector.

In Australia, like many other countries, the majority (around 90%) of registered insolvency practitioners are male. Women are vastly underrepresented in the insolvency sector. Diana Newman became Australia’s first female registered bankruptcy trustee back in 1971, and the country’s first registered liquidator in 1990. To date, women comprise a little more than 10 per cent of the country’s registered insolvency practitioners. This compares to New Zealand, where more than 20 per cent of insolvency practitioners are women, and 15% in the UK.

There’s still a lot of work to be done to address the situation. However, actions such as the recent Parliamentary Joint Committee on Corporations and Financial Services inquiry into corporate insolvency, is seeking to increase the number of women in the profession.

I am proud to be helping change the balance within Jirsch Sutherland and the wider insolvency sector. In April this year I was registered as a bankruptcy trustee, after having been registered as a liquidator five years ago.

In Australia, insolvency practitioners need to be registered with ASIC to accept corporate insolvency engagements, or with AFSA to accept personal insolvency engagements (including sole traders). Currently there are only 215 trustees registered in Australia and around 12 per cent are female. And this time last year there were only 12 women nationally who were both liquidators and trustees (of 172 people who held both registrations) so I’m extremely proud to join this select group.

Addressing the issue

To help address the imbalance, the Federal Government examined the gender gap in its inquiry into corporate insolvency, which was published in March 2023. The report found ASIC encourages registered liquidators to sponsor those senior female staff who are good candidates for registration as a liquidator by lodging an application for registration.
One of the reasons identified in the report for such a low number of female insolvency practitioners, was parenting issues. Applicants need to demonstrate at least 4000 hours of insolvency experience within the five years prior to making the application to become a registered liquidator or registered trustee. Women who take time out to have children find meeting this number of hours to be a challenge, Since January 1, 2021, however, greater scope is now given when considering what work experience is relevant and will be considered when deciding if an applicant has the required relevant work experience to be registered as a liquidator.

“ASIC notes that some successful applicants (both male and female) that applied following the 2021 amendments did not have 4000 hours experience directly related to formal external administration and controller appointments during the previous five years, but were otherwise suitable applicants for registration, and the committees decided they should be registered as a liquidator.”

Similar provisions apply in relation to the application to be registered as a trustee.

The road to my recent registration was a “process”. Not least because on paper I didn’t meet a couple of the criteria. My degree wasn’t the kind required as I completed that whilst living in the UK and I didn’t meet the hours test, as I’d had two extended periods of maternity leave in the relevant period, plus I have since returned to work part time to help balance work and family life. But I got there!

My journey involved a written application, a panel interview with a representative of AFSA, a representative appointed by the minister, and an ARITA representative who was an experienced practitioner. The interview is a technical one, where you are asked a series of technical and ethical questions covering a broad range of topics and areas. I was asked around 35 questions and it took more than an hour. Some interviews can run much longer.

I qualified as an insolvency practitioner when I worked in the UK, more than a decade ago. Back then, I had a big personal insolvency practice, and after relocating to Australia in 2013 I always wanted to get back to that. I feel having registrations as both a liquidator and trustee make you a better practitioner. Also, from a personal development and achievement perspective, the fact that there are so few women in the industry was a big driving factor for me. It’s nice to be able to say I am one of only around 20 women in Australia that currently have both registrations. As a mum of a little girl, I also think it’s important to show we are taking steps to push through and break down gender barriers. As someone said to me recently, “You can’t be what you can’t see”; however, I’m hoping the increasing number of women becoming registered means that the next generation in our profession will have plenty of female role models to look up to.

I feel that when it comes to the number of women trustees in Australia, the 4000-hour requirement is a hurdle. Requiring 4000 hours in the five years prior to application is a challenge for many women as by the time they get to a senior level, they have often had one – or in my case two – extended periods of maternity leave and possibly returned to work part time. But there is now discretion for the committee considering an applicant to decide to register someone – as they did for me – so there is a route available and I would encourage people not to be put off simply because of that requirement.

Emma Mos
Principal
Registered Liquidator / Registered Bankruptcy Trustee
Jirsch Sutherland