Set Measurable Objectives to Achieve Gender Diversity - Say Directors

The Australian Institute of Company Directors says companies should have an established policy on gender diversity in the boardroom and in senior management as well as measurable milestones towards achieving their diversity goals.

Company Directors’ Chief Executive, John Colvin, said that diversity milestones should vary from company to company and be tailored to reflect the particular needs of each board.

Colvin was responding to comments made at the launch of the Women on Boards Traffic Light Index, which found that sectors with measurable gender balance targets are moving ahead of those that rely on good intentions and rhetoric alone.

“We agree that, while real progress has been made, there is still a long way to go when it comes to achieving genuine diversity in our boardrooms,” Colvin said.

“However, it is companies and boards which should determine the diversity profile that meets the particular requirements of their organisation. That profile is likely to differ depending on the nature of the business, the stage of development and the part of the world in which it operates.”

“The profile will also need to reflect the skill and experience set that the board has determined is necessary to effectively oversee its business.  Effective recruitment strategies, including ensuring female directors are represented on shortlists submitted to nominations committees, will need to be identified to attract people who reflect the desired profile.”

According to the Australian Institute of Company Directors’ real-time statistics on board diversity, the number of women on ASX 200 boards continues to grow.

“Women now make up 16.4 per cent of the directors on ASX 200 boards. This has almost doubled since Company Directors’ introduced its range of diversity initiatives in late 2009 and the ASX Corporate Governance Council's Principles and Recommendations on diversity were released in 2010 (The figures show that only 8.3 per cent of these board positions were held by women in January 2010.)

For ASX 100 companies this figure has reached 19.5 per cent, while women make up 20 per cent of ASX 50 directors. In 2013, 22 per cent of new appointments to ASX 200 directorships have been women, compared to just 5 per cent in 2009.

“Any diversity policy could include the implementation of family-friendly policies and flexible work options and well as strategies to address the loss of talented employees, particularly women, from middle management positions,” Colvin said.

“It might also include setting explicit key performance indicators for Chief Executives to foster the development of women in management and setting measurable objectives for the number of women on boards and in senior management to overcome what we believe is still a significant problem – the blockages in the ‘pipeline’ of women gaining positions in senior executive ranks, specifically line positions, that could prepare them for future directorship roles.”

Colvin said that Company Directors has initiated a number of programs to help achieve greater gender diversity on Australian boards.

These include measures aimed at encouraging more board appointments from the existing pool of talented women, such as our Chairman’s Mentoring Program, now in its third year, and our Board Diversity Scholarship programs,” he said.

The Australian Institute of Company Directors is a peak body for company directors nationally with 33,000 members.

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