Who are the people on Australian boards and how long do they stick around? We know that there still aren’t enough women and not enough ethnic diversity represented. But being a board member, regardless of gender, age or background, means having qualification, experience, ability and confidence. Let’s take a look at who’s on the board.
Please click here to download Watermark's 2023 Board Diversity Index.
Board members in Australia come academically qualified. An undergraduate degree is the minimum standard qualification for most board members and more than 80% of current board members are qualified to this level.
These skills, along with experience, are spread across industry sectors with little or no perceptible change from previous studies. Mining, energy and resources along with technology sectors dominate and there is an unsurprising decline in representation of directors with accounting, banking, finance, engineering, manufacturing, construction and legal qualifications and experience.
Brains on boards
While an undergraduate degree is considered de rigueur for board membership these days – with more than 80% of current board members qualified at this level – there are also impressive numbers of directors holding MBAs and/or finance-related degrees.
More women directors than men have gained qualifications in some disciplines, notably PhDs, governance qualifications and masters degrees. Here’s the breakdown:
PhD – 7% of all board members (10% female, 6% male)
MBA – 19% (20% female, 18% male)
Masters (other) – 18% (21% female, 17% male)
Undergraduate degree – 82% (88% female, 70% male)
Finance (FCA/FCPA) –18% (18% female, 17% male)
Governance (AICD/GI) – 36% (52% female, 28% male)
Other qualifications – 28% (27% female, 28% male).
Softly, softly
Although women directors are equally as likely as men to have sector experience in marketing, communications, media, healthcare and legal sectors, women are more likely than men to have experience in human resources, change and consulting; and they are under-represented in sectors traditionally seen as male-dominated, including property, engineering and manufacturing, banking and financial, resources, agribusiness and general management.
In view of this, it is more than a coincidence that more women directors than men tend to come from sectors known for valuing “soft skills” typically taught in humanities degrees, such as skills in communication, collaboration and emotional intelligence.
Sixty is the new… sixty
The average age of directors hasn’t changed in the past five years, with 60 being the magic number and this is regardless of the size of the company.
The average male director continues to be slightly older than his female counterpart. Let’s take a look:
Average age overall 60.6
Average of women 58.1
Average age of men 61.8
Across the sectors we see some marginal differences, with more younger directors in the technology, telco and resources sectors, and more older directors in healthcare.
While the overall average age of a board director remains rock-steady at 60, Watermark research suggests the ongoing ageing of the ASX board. In our current survey only 7% of male directors are under 50, compared to 9% two years ago, while 11% of female directors are under 50 versus 17% two years ago.
But age shall not weary them. While the proportion of female directors over 70 remains stable, there is an uneven trend for male directors in this age group with the proportion bouncing around 15% and 22% over the past two years. This variant suggests, overall, that board ages are in stasis, rather than trending older.
It’s debatable whether Australian boards trending older is healthy when considering diversity, inclusion and progress. In the US we see a trend in the opposite direction to apparently more youthful boards. But it can also be argued that as the population ages, more executives (retired or otherwise) might choose to remain participants in commercial life, bringing an accumulation of experience and wisdom. Then again, older directors may be seen as out of touch with trends in market competitiveness, regulatory conditions and ways of working.
Ins and outs
There has been no change in average length of tenure for board members. The trend to cap tenure at no more than 10 years has consolidated and it continues to be unusual for a director or chair to serve more than 14 years on the same board. This is particularly true for women, where the percentage of women serving a board for more than 14 years is around 6% for directors and 7% for chairs.
Across the board the average number of years for a chair tenure is persistent, with the breakdown being almost identical year-on-year, showing chairs are staying in place longer (20+ years).
Off the leash
Independence continues to increase across all company size categories, but especially among the largest companies. This trend solidifies the notion that publicly listed companies in Australia have a healthy independence profile.
One contributor to this trend is that nearly all (95%) of female directors are regarded as independent. In other words, they are not “internal” appointments, occupying CEO/GM roles and sitting on their own boards. This is a stark difference compared with the percentages for men, with the equivalent representation of incumbent c-suite male directors at around 25%. This gap could possibly narrow as the proportion of women at c-suite level continues to climb, resulting in more women becoming “internal” appointments to boards. However, we are yet to see this trend emerge.
At most, one in five directors is regarded as non-independent and this number falls dramatically to about one in 17 when those incumbent c-suite directors are extracted from the numbers.
So that is who is on ASX300 boards in terms of skills and experience, age, tenure and independence. If you and your organisation would like to know more about diversity on Australian boards or are looking for exceptional, diverse talent for your board, we'd like to help - please don't hesitate to contact us.