ASX 200 Boards On track for Gender Diversity Targets

More women are getting a seat at the table but current appointment rates for boards need to be maintained if Australia is to achieve gender diversity targets, according to new research.

A study commissioned by the Australian Institute of Company Directors, analysing board appointments in the 12 months to June 2016, shows ASX 200 boards are in line to meet a target to achieve 30 per cent of female representation by 2018.

It marks the first time the target has appeared achievable since it was set by the AICD in early 2015.

However there were still 22 companies listed on the ASX 200 that didn’t have a single woman on the board.

AICD managing director and CEO John Brogden told Pro Bono Australia News while the focus on the issue of gender diversity was finally yielding results, the target would only be reached if the current positive momentum was sustained.

“This is an extremely encouraging result which shows that real progress is being made on the appointment of women to ASX 200 boards,” Brogden said.

“The AICD set a target early last year… for ASX 200 boards to have 30 per cent women by the end of 2018 and this is the first piece of research that shows we’re on track to get that outcome, so we’re very pleased.

“But it is all based on maintaining the appoint rate of 38 per cent women to boards between now and the end of 2018.”

The AICD Quarterly Gender Diversity Report, released with the Mercer research, found the yearly average appointment rate has climbed since last year with more than 40 per cent of new board appointments so far this year, were women.

The percentage of women on ASX 200 companies is now 23.8 per cent, which has increased from a low of 8.3 per cent in 2009.

The number of companies that had already reached the 30 per cent target now stands at 53, up by two since the last quarter, and from 38 companies this time last year.

Other key findings of the report include:

• Monthly new female appointment rates to ASX 200 boards have risen from 9 per cent in 2009 to 42.8 per cent in the year to June 2016.
• Monthly new female appointment rates (as calculated by the AICD) need to be 38 per cent or above to meet the 30 per cent target by the end of 2018.
• Based on the current rates of female appointments and exit rates, gender parity on ASX 200 Boards is achievable by 2022.
• Among ASX 200 companies, the Household and Personal Products (40 per cent), Insurance (34.8 per cent), and Utilities (33 per cent) sectors have all already exceeded the 30 per cent target.

Brogden said there were several reasons for the recent surge in the number of women on boards.

“There’s been a lot of work being done by advocates for diversity on boards, we’ve done a lot of work, we set the target publically, we’ve written to all ASX 200 chairs asking them to adopt the target, the AICD has also for many years run a mentoring program of scholarships for women, we’re also seeing investors, in particular superannuation funds, raising their expectations of female appointments to boards, so that’s coming from the investor community, so there are a lot of things that are coming together all at once and I guess the other thing is this is an idea whose time has come,” he said.

“The 30 per cent target is important because research shows this is the level at which the number of women on a board becomes a critical mass. Put simply, it’s the point where a group has a voice at the table, not just a seat.”

Brogden said diversity was very important.

“In 2016 we should be taking advantage of the diversity of opinion on boards,” Brogden said.

“Secondly all of the research we’ve done shows that it’s not only the right thing to do it’s also good commercial sense.

“Our research shows that the more diverse the board, the better performance of the organisation.”

But the data showed some companies are still not embracing women.

In a recent survey the AICD contacted “blacklisted” companies with no female board members, plus a further 60 boards with only one woman, to ask them why they did not appoint women.

The responses included: “we don’t have to and we don’t want to”, “women aren’t reliable enough”, and “women talk too much and make the board meeting too long.”

Brogden said it showed there was still a lot of work to do.

“We got some very prehistoric responses from people with respect to their attitudes towards women and frankly they were pretty extraordinary and in most cases pretty wrong,” he said.

“So, we know that in some quarters we’ve still got an enormous amount of work to do.

“We still have 22 boards with no women at all on them in the ASX 200, the top 200 listed companies in the country, and that’s pretty poor, and those companies are running out of excuses.

“We will continue to put the pressure on them, what they really have to do is come to terms with the fact that the benefits are very clear, and they are very measured these days.

“So they are doing themselves a disservice by not broadening their base in terms of diversity on their board.”

Deputy leader of the opposition and Shadow Minister for Women Tanya Plibersek said these types of attitudes showed there was more that needed to be done to secure the social, economic and strategic benefits of gender diversity on boards.

“Attitudes like these show why it’s still important to set targets and hold business to account for reaching them,” Plibersek said.

“The use of participant targets gives us something measurable to aim for and work towards.

“Cultural change is needed in organisations like these if we are to maintain the appointment rate of 38 per cent needed to meet the 2018 target. And once the 2018 target is met, we should stretch ourselves again by raising the bar.”

“While 30 per cent is a step in the right direction we shouldn’t accept it as our final destination.”