Firms serious on gender diversity, but there’s more to be done

According to our statistics, at September 30 women accounted for 31 per cent of S&P/ASX 200 board appointments in 2015 compared with 30 per cent in calendar 2014 and 22 per cent in 2013. The nine percentage point jump in less than two years is an indication of a significant shift in sentiment that we have every reason to believe will continue.

This article appeared in the The Australian on 22 October 2015.

There is finally cause for hope in the diversity debate on the boards of Australia’s largest public companies.

According to our statistics, at September 30 women accounted for 31 per cent of S&P/ASX 200 board appointments in 2015 compared with 30 per cent in calendar 2014 and 22 per cent in 2013. The nine percentage point jump in less than two years is an indication of a significant shift in sentiment that we have every reason to believe will continue.

Several companies which had no women on their boards have appointed female directors in 2015, including Ramsay Health Care, GUD Holdings and -Cabcharge.

However, there is no question that Australian boards need to increase the pace on the appointment of female directors. The proportion of women on the boards of S&P/ASX 200 companies remains too low at 21 per cent, the number of females on federal government boards has slipped and other organisations are guilty of gender bias.

As conveners of the Australian chapter of the 30% Club, the Australian Institute of Company Directors has made a very public commitment to increasing the proportion of women on S&P/ASX 200 boards to a minimum 30 per cent by the end of 2018.

This would be an important milestone because our biggest public companies are role models.

This is an ambitious target - one that requires a genuine commitment from the chairpersons and boards of these key institutions. But we are confident it can be met.

Ninety-six companies in the S&P/ASX 200 index need only one more female director to meet the minimum 30 per cent target. If the chairpersons of those companies pursue diversity principles as part of the cyclical board renewal process then up to two-thirds of the index should easily meet the 2018 target.

It is not hard for many of the 36 companies that must appoint two or more female directors to meet the target as ASX listing rules state every director has to stand for re-election at least every three years. This should give chairpersons enough time to consider the skills required by their boards and identify appropriate candidates for directorships.

The British chapter of the 30% Club provides further evidence that the strategy for improving gender diversity we’ve adopted can yield results. The club was launched in Britain in 2010 with a goal of achieving 30 per cent women on FTSE 100 boards by the end of 2015 - at present the figure stands at 26 per cent up from 12.5 per cent five years ago. It has yet to hit its target but it has proven unequivocally that a measurable goal with a defined timetable driven by those in power and a willingness to collaborate can yield real results.

We are one of a number of groups arguing for greater diversity on Australian boards, including Women on Boards, Chief Executive Women, Male Champions of Change and the Australian Council of Superannuation Investors.

Each of these groups brings different ideas, skills and resources to the table but share a common goal. One difference between us and some of those organisations is in how that common objective should be achieved.

The AICD believes the best way to tackle this challenge is to drive genuine engagement with boards and organisations that encourages them to change ingrained practices. We do not believe that legislated quotas will facilitate that engagement.

Instead we have committed to a very public stance that Australian boards should increase the proportion of female directors to a minimum 30 per cent within a reasonably short time frame.

Research shows the presence of three women, or 30 per cent of a 10-member board, is the tipping point where “critical mass” is reached in a group setting. It is the level at which the voices of the minority group become heard rather than being simply represented and where, therefore, the increased capacity for diversity to deliver value begins to be optimised. We want the 30% Club to be a unifying force in efforts to make all Australian boards more representative of the population at large by acting as a positive advocate for change that brings together disparate voices in the debate.

Our singular aim is to get more women on to the boards of big companies so the traditional gender imbalance can be rectified once and for all.