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Can boards get past the cultural stall?

If our boards are still “too male” they’re also still “too pale”. Ethnic diversity and representation is an issue that is slowly being considered, but slow it is – and in some areas it has in fact stalled. So, why are our company boards still largely Anglo-European?

Please click here to download Watermark's 2023 Board Diversity Index.

Australia prides itself on being a multicultural nation. According to the Australian Bureau of Statistics, our “girt by sea” nation is home to people from more than 270 ethnic groups. But genuine multiculturalism should mean the inclusion of ethnic diversity in all areas of Australian life.

We live in a time of challenges and, according to Megan Motto FGIA of the Governance Institute of Australia, "in times of challenge and crisis organisations need a diverse mix of views, problem-solving skills, lived experience and knowledge in the boardroom not just to survive, but to thrive”.

“The Governance Institute is proud to be a joint partner in such important work as we support the push for great diversity, inclusion and equality in the decision-making process of Australia’s leading companies,” says Motto.

Wake-up call

While there has been a welcome uptick in the number of Indigenous directors, their overall representation on Australian boards remains disappointingly slow. For now. Indigenous director representation on boards has gone from two to four, and occupying six seats.

Fair enough, it’s not a big number, but it shows change is happening. There is still a long way to go, though, until boards at least match the proportion of Aboriginal and Torres Strait Islander people in the total population, which the census measures as just over 3%.

There is a marked direction of change in Australia’s population towards more people with Asian ethnicity, particularly as people with Chinese ancestry now make up the fifth largest group. However, the ASX boardroom is not shifting in this direction in any discernible way and, perhaps, may be drifting in the opposite direction. Without vigorous, muscular advocacy on behalf of ethnic groups, this situation is unlikely to change in the immediate future. Especially given that the diversity of Australian boards lags behind those in the United States, where the gender and ethnicity representation on boards is greater. This is partly due to the increased legislative action in some parts of the US to improve board diversity, coupled with activism among institutional investors.

The way forward

The inclusion of ethnic diversity into all areas of Australian life must go beyond enjoying tantalizingly exotic flavours in Asian, Middle Eastern, African and other non-European restaurants. Now, with growing awareness, the push for change may gain strength and speed to bring Australian boards to contemporary cultural representation.

While there is still a way to go to achieve optimal diversity, there is an undeniable, substantial and probably irreversible groundswell of change towards better representation of ALL Australians on boards, which is good news to embrace and work with.

David Evans, Managing Partner of Watermark, says that Watermark Search is committed to helping Australian companies broaden the diversity of their boards ahead of targets.

“We regularly challenge chairs and boards to look beyond the initial tight criteria of just ‘experience on a similar board’ and really focus on what other people might add to the board’s conversation,”he says. “Our role is also to introduce these great candidates to boards.”

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