ASX companies stagnating on gender equality

Women make up less than a quarter of this year’s board appointments at Australia’s ASX 200 companies, new research shows.

The Australian Institute of Company Directors’ (AICD) latest gender diversity statistics found the appointment rate of women sat at just 23 per cent in 2019, while overall female directors account for 29.5 per cent of all ASX200 board positions as of 31 March.

AICD has had a 30 per cent female target since 2015, and managing director and CEO Angus Armour said he was disappointed this goal was yet to be achieved.

“At the beginning of this year we expected to achieve our 30 per cent target imminently, but unfortunately the overall percentage has fallen since the start of this year,” Armour said.

“I challenge all boards to look around their boardroom and ask if there is sufficient diversity of skills, experience and gender to effectively meet the demands of a challenging governance landscape.”

The statistics also reveal there are still four companies with no women on their boards and 50 companies with one female board member.  

Armour said far too many companies appeared to think diversity stopped after the appointment of one woman.

“Diverse boards help prevent group-think, leading to better outcomes for shareholders, consumers, employees and the community. They promote greater innovation and improved bottom lines,” he said.

AICD has argued the 30 per cent target represents “the floor and not the ceiling” for gender diversity and eventually want a 40/40/20 model – 40 per cent female representation, 40 per cent male and 20 per cent either/other gender.

The report also noted much of the issue fell outside the largest listed companies.

It said the ASX 20 and the ASX 50 had been doing the heavy lifting for the rest of the index. By analysing the data, it becomes clear the percentage of female directors noticeably falls as you move further down the index.

This data follows another recent AICD report which found the confidence of Australia’s company directors was at its lowest point in over two years.

The AICD Director Sentiment Index showed confidence has fallen over 21 points to minus 16.9 over the last six months, largely driven by pessimism around the health of the Australian, Asian, US and European economies.

The index also showed how directors were responding to a changed governance environment following the banking royal commission.

“Ninety one per cent of directors say their board is taking action to improve the culture of their organisation,” Armour said.

“They also nominate the need to demonstrate greater respect for customers and communities as a priority for boards to regain community trust.”

Directors nominated climate change policy as the number one key issue for the federal government to address in the long term.

“Directors are likely frustrated by a lack of bipartisan support for initiatives to address climate change,” Armour said.

“Boards are hearing from investors, regulators and the broader community that they expect closer attention to be paid to this issue.”