WOMEN now represent 30% of all new appointments to the boards of ASX 200 companies – compared with an extraordinarily low 5% in 2009 before the Australian Council of Superannuation Investors (ACSI), and others, began the campaign for more diversity in Australian boardrooms. We welcome the news and look forward to working with the ACSI as the 30% Club launches in Australia. By the end of 2014, women were occupying almost 300 seats in ASX 200 boardrooms (19.3% of all directors), which was a more than doubled presence since 2010.
ACSI is today launching an initiative, aiming to have women comprising 30% of all boards in ASX 200 companies within the next three years – a short but, ACSI believes, achievable timeframe. ACSI makes this announcement with the strong mandate of its members, institutions in Australia and across the globe, which represent over $1.6 trillion in investments and own approximately 10% of the average ASX 200 company. The issue will be a key priority of ACSI’s engagement with ASX 200 boards in 2015, with a focus on the alarmingly large number of companies without a single female director.
ACSI CEO, Gordon Hagart, commented “ACSI’s motivation to act in this space is the strong evidence of the links between board gender diversity and financial performance. We have been pleased with recent improvements on gender diversity, but these come from a very low base. Our data show that unless we see an accelerated number of women appointed to ASX 200 boards, further progress will be unacceptably slow.”
Mr Hagart added “ACSI hopes that Australian boards will willingly embrace the challenge, avoiding the need for the legislated quotas adopted by many other countries where improvements in diversity seemed to be happening too slowly.”
ACSI’s Program for 2015
As at February 2015, almost half of the companies in the S&P/ASX 200 index have one, or fewer, women at board level.There are now 36 companies – including one in the ASX 50 and another three in the ASX 100 – that have no women on their boards.
Each year, ACSI meets privately with directors representing almost three-quarters of the S&P/ASX 200. In 2015 we will be asking the laggards on gender diversity to explain how they aim to address the issue in the near term. In the worst cases, ACSI may recommend to its member funds (who collectively speak for more than 10% of the votes in most ASX200 companies) to vote against re-elections of directors in those companies.
“It is heartening to see that so many of Australia’s business leaders have responded in recent years to the challenge set by ACSI, and others, to diversify the intellectual, philosophical and skills inputs in their boardrooms through gender diversity,” said Mr Hagart.
“Having one woman on your board is not, however, ‘job done’. And having no women on your board leaves ACSI, and its members, wondering about the fitness of company chairs that have not yet been able to find an appropriately skilled woman to appoint. What else might they have missed in their role?”
Boards that lack a diversity of views put investors’ capital at risk. As Federal Treasurer Joe Hockey noted in a recent speech, “…it is a corporate governance issue not to have proper representation of 50 per cent of the community on a board of directors”.
A number of recent IPOs have demonstrated that companies are increasingly responding to investor expectations around board gender diversity. The Medibank Private float was notable for constituting a board with a majority of women directors. Similarly, Spotless Group Holdings and Japara Healthcare recently listed with female board chairs.
Why investors care about board gender diversity
Poor representation of women in the boardrooms and executive suites of Australian companies has long been an issue for the Australian Council of Superannuation Investors. In 2010, ACSI was a leading voice in the groundswell of change that has subsequently resulted in doubling the presence of women in public boardrooms. However, women still occupy less than 20%1 of all board seats.
“ACSI’s approach to board gender diversity is based on the belief that skilled and suitably diverse boards make for better-governed companies and, as such, higher value investments over the long-term,” said Mr Hagart.
ACSI is concerned that the rate of women appointments to S&P/ASX 200 boards appears to be plateauing at around 30 per cent (based on AICD figures) in spite of growing empirical evidence (such as the recent Credit Suisse report The CS Gender 3000: Women in Senior Management) that gender diversity in both the boardroom and executive management is a key marker of a well-governed, high-performance entity.
For additional information on the news that is the subject of this release please contact:
Chief Executive Officer
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1 ACSI figures are based on all board members (i.e. executive and non-executive)
The Australian Council of Superannuation Investors (ACSI) provides independent research and advice to assist its member superannuation funds to manage environmental, social and corporate governance (ESG) investment risk.
ACSI currently represents 37 Australian and international funds who collectively manage over AUD$1.6 trillion in funds under management.