New research sheds light on the progress that has been made in advancing women and those from culturally diverse backgrounds onto the boards of ASX 300 companies.
The Board Diversity Index, released on Wednesday, 4 August 2021 by Watermark Search International and Governance Institute of Australia, surveyed 300 organisations and more than 2,000 board seats on the following measures of diversity: gender, cultural background, skills, age, and tenure and independence.
The report found that the number of ASX 300 companies with one or no female directors has halved since 2016, with the number of women on boards having risen by 60 per cent in that time, going to 633 in 2021, up from 399 in 2016.
Moreover, the report found the number of boards with at least 30 per cent women has tripled, up to 161 in 2021 from 54 in 2016. Boards with no women, it noted, have decreased from 59 five years ago to 14 now.
Governance Institute chief executive Megan Motto said the rate of change on gender diversity uncovered is significant for Australia’s boardrooms.
“On this current trajectory, there will be no ASX 300 companies without a female director by 2026, and gender parity achieved in the boardroom by 2030,” she said.
“These milestones, while well overdue, will be truly momentous and we urge companies to ensure they keep up the positive action and strategies.”
However, while the gender trends are positive, cultural diversity is moving at a “glacial pace”, the researchers said.
According to Watermark Search International managing partner David Evans, cultural change in the boardroom is moving at a much slower pace with 90 per cent of directors still boasting an Anglo-Celtic or European background.
Australian boardrooms, he reported, “remain dominated” by persons with such heritage.
“Based on current trends, it will take 18 years for the boardroom to be reflective of Australia’s cultural diversity,” Mr Evans said.
Elsewhere, the report found that women are more studious in their efforts to enter the boardroom, “outstripping men in virtually every category” of educational qualifications.
It identified that 8.4 per cent of female board members having a PhD compared to 5 per cent of males, and 22.1 per cent females have an MBA, compared to 16.9 per cent of males.
Male directors remain slightly older than female directors, with the average age of directors being 60 and a much higher proportion of women directors than men being under the age of 50.
Interestingly, the youngest director of an ASX 300 company is 27, while the oldest is 89.
Longevity on boards, the report added, is “more closely correlated” with men than women.
Finally, technology, healthcare and property experience are starting to become more essential skills for those at the board level, while accounting and financial skills – while still the most prevalent – have decreased in prevalence from 39 per cent to 34 per cent.
The findings, Mr Evans proclaimed, demonstrate where corporate Australia currently stands on diversity, the direction of such efforts and what more needs to be done. Moreover, he added, it demonstrates the need for “continued improvement”, with ASX boards needing to “drill down” into the issues highlighted and see where further work is needed.
Ms Motto said that greater diversity is not just reflective of broader society, but it is also better for business — and organisations need to pay close attention as pressure continues to build.
“We are seeing investors and other stakeholders increasing pressure on companies to be more reflective of the community within which they operate. Consumers are increasing the pressure, choosing to spend their dollars with diverse organisations which can demonstrate strong ethics and good culture,” she surmised.
“Internationally, we are seeing countries list diversity as a reportable benchmark for companies and firms are starting to link executive remuneration to diversity targets. Momentum is gathering and organisations really need to be on the ball.”