Scrutiny On Aussie ‘Zero Women’ Boards

The Australian Council of Superannuation Investors (ACSI) has written to the chairs of more than 30 companies in the ASX200 with poor representation of women at board level, reminding them of the 30 per cent target that is fast becoming seen as the minimum benchmark in corporate Australia.

In the run up to the 2015 annual meeting season, ACSI said it wrote to those companies which still have only one female director or are yet to appoint a woman.

In February this year, the organisation formally launched a new policy which aims to lift the representation of women on the boards of ASX200 companies to at least 30 per cent of all directors by the end of 2017.

ACSI said it would likely be well into the next decade that the 30 per cent level is achieved – assuming even a higher attrition rate of male than female directors. So far in 2015, women represent little more than one director appointment in every four to ASX 200 boards.

ACSI said that as it prepares voting advice for its 37 Australian and international members, who collectively speak for an average 10 per cent of the votes in ASX 200 companies, it will be reviewing the progress and commitments of boards towards increasing the number of women directors.

“We are seeking tangible commitments and evidence from these companies that they have strategies for achieving gender diversity at board level in the near term, rather than the sometimes surprisingly vague statements often made to comply with ASX Corporate Governance Principles,” ACSI Chief Executive Louise Davidson said.

“We have a strong mandate from our members – institutional investors in Australia and across the globe, which represent over $1.6 trillion in retirement investments – to consider recommending a vote against the re-elections of directors at companies that exhibit either no willingness, or progress, in this regard.

“It is now almost five years since ACSI first began urging Australian companies to seriously appraise the gender make-up of their boards, which means our members have been the very definition of ‘patient capital’. They may not remain that way on this subject.

“It was encouraging to see that, since our policy launch, the only ASX 100 company without a woman on its board has now appointed two female directors. Many companies appear, however, to be missing the point that boards with no, or low, female presence risk underperforming their competitors – and therefore becoming less attractive investment propositions for our members.

“There is growing evidence of links between gender diversity and financial performance in companies, which suggests that, in more difficult economic climates, boards that do not have more diverse make-ups and skills to draw on may well suffer.”

According to ACSI, studies on those links include the recent Credit Suisse report, The CS Gender 3000: Women in Senior Management, which found that “greater diversity in boards and management are empirically associated with higher returns on equity, higher price/book valuations and superior stock price performance”.

33 per cent of S&P/ASX200 companies still rate in the two lowest categories of the Australian Council of Superannuation Investors’ annual review of sustainability disclosure.