Steady progress has been made in the 12 months since the Australian Institute of Company Directors (AICD) called for a 30 per cent gender diversity target on S&P/ASX 200 company boards, with 45 already attaining or exceeding the target.
Last year ended with a 2 per cent increase in female board members to 21.7 per cent, indicating companies were indeed realising the value to their business of a more gender balanced board.
“It is now beyond argument that diverse boards make better decisions,” says AICD chairman Elizabeth Proust AO FAICD. “A more diverse board will avoid ‘groupthink’, look at the issues from multiple perspectives and make good decisions.”
Boards need to be mindful that despite some good progress, there is still much to do.
Thus far, it is clear a higher rate of increase is needed to ensure that the 30 per cent target is reached by 2018. At the end of 2015, the appointment rate was 34 per cent, and in order to meet the 2018 target, it must be at least 40 per cent.
The ASX 200 and ASX All Ordinaries boards are also under scrutiny, with the porportion of women on their boards at just 19.9 and 16.5 percent respectively.
To aid boards in reaching the 30 per cent target, our Gender Diversity Quarterly Report identifies where additional work can be done to improve their gender diversity. This includes trends, shared experiences and information to help directors understand the best path for their business, a 30% Club update and why domestic violence is a workplace issue.
The Australian Government has taken the lead to ensure gender diversity on its boards, as announced by Michaelia Cash, Minister for Women, in early March. The target for female representation across all Australian government boards will be increased to 50 per cent, from the current target of 40 per cent.
According to the latest figures, the number of women on government boards is 39.1 per cent, compared with 41.7 per cent in 2013. Ten out of 18 portfolio areas met the 40 per cent target.
“Boards need to consider a wide range of factors in selecting new directors. Board effectiveness is crucial. This is most likely to occur when you have a group of skilled people, bringing their diverse experiences and skills to the board decision-making process,” Proust adds.
AICD continues to work hard to advocate for gender diversity on boards and will be announcing new research partnerships and programs in the next few months.
For more information on how boards are tracking towards the 30 per cent gender diversity target, read the Gender Diversity Quarterly Report.