With just under 30% of our ASX200 Board roles filled by women is it ‘Diversity job done’?
It’s good to have a target to aim at and the minimum target chosen for female representation on our ASX Boards by The 30% Club (the hint is in the name) is 30%. The 30% Club was only established in 2010 and in the space of 9 ‘short’ years has made a clear contribution to shifting the needle on female Board representation, not only in the UK where it originated, but also 13 other countries including Australia.
In 2009, 128 Board Seats were filled by women in the ASX200 (8.7%), in 2018 that number was 440 (29.7%). That’s a significant shift even though representation has remained stubbornly stuck at just under 30% for the last 18 months. That’s pretty close to 30% …job done? We don’t think so.
From the ASX Governance Committee to the Australian Institute of Directors, from The 30% Club to the NSW Government, and many stops in between, there are supportive statements about widening the conversation past gender and onto much broader thinking about what diversity means …even though the first order of business (gender) is incomplete.
From the perspective of social justice, having our Board members drawn from a much wider background would be a good thing. The makeup of our Boards being closer to that of their key customers, on or offshore, is also a good thing given it has the capacity to provide much greater insight into their customer base. There is also enough research that points to more diverse teams achieving superior results.
There has been progress on gender diversity to the point that when we talk about diversity it is assumed that we mean gender. At Watermark we don’t. We mean ethnicity, age, professional background and education, amongst other things. These factors do not exclude further layers of diversity such as religious persuasion, ability, sexual preference, thinking style or the many other components that make up the concept of diversity, however they are easier measure and more socially acceptable to disclose.
Watermark’s Board Diversity Index examines age, cultural background, independence and professional skills in the boardrooms of the ASX300 in attempt to broaden the conversation. In short…the conversation needs to broaden because the age, cultural and skills backgrounds of our ASX 300 directors is pretty homogenous. Somewhat surprisingly new entrants into the ASX300 are even less diverse than the established members…somehow the message, even on gender, is not getting through.
As a country we grapple with being part of Asia…are we in...or are we out? From a Board perspective we are out. 87 of the 1994 Board roles in the ASX300 are filled by those with an Asian cultural background…that’s 4.4%. Asia makes up over 80% of our merchandise exports, 39.6% of our migrants and over 50% of our International enrolments in Tertiary education…we seem to be lagging.
From an age perspective 6% (119) of our ASX300 Directors are under 50 years of age. Our boards are younger than they were 10 years ago…but not by much and the average age is slowly creeping up. We don’t think that is a bad thing. People are living healthier lives for longer and the Government is slowly shifting the retirement age forward…so why not contribute at a Board level for longer? What we think is more important is the age range within a board. Do we have experienced heads combined with those from a younger, more broadly connected and educated demographic? It’s just another element of diversity.
At the end of the day if our boards combine people of different gender, different work experience, different ages and different cultural backgrounds they will have given themselves the best opportunity to guide their companies having considered more ways of arriving at an optimal solution.