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Gender balance on boards is improving… slowly

​Australian boards are still accused of being “too male, too pale and too stale”. So, what is the current state of play when it comes boards being “too male”? When it comes to “balancing the books”, those gender figures still require some hard work and proactive accounting.

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

Australia’s 2068 reported board seats are currently divided unequally – 1350 (65%) are filled by men, while 718 (35%) are filled by women.

While there is plenty of lively conversation about diversity and representation, many board members are deemed “stale”. Put bluntly, they are typically older and stuck in their ways. Often described as “a boys club”, male dominated boards can be slow to change.

It’s not size that counts

Any useful discussion regarding gender balance needs to consider a benchmark and the widely accepted gender target is 40/40/20 (40% women, 40% men and 20% open). The good news is that Watermark’s analysis has seen a 3% increase during its survey period.

More good news is that these findings are consistent with the latest findings of the World Economic Forum. In its 2022 Global Gender Report, the forum reported that “...the share of women hired into leadership roles worldwide has seen a steady increase, from 33.3% to 36.9% in 2022.”

Even more good news, Australia isn’t lagging behind as there are some striking statistics regarding where women are placed. There has been a surge in the representation of women on company boards for smaller organisations, whereas previously it was the larger the organisation, the more likely it was to see a higher representation of women directors. Since 2016, the percentage of women on the ASX 200-300 group has risen from 15% to 44%, outstripping ASX Top-50 companies.

So, let’s take a closer look at this progress in real terms.

While it may be slow, there is a compelling momentum towards greater female representation – if not equality.

There are now significantly fewer boards with zero or one women directors and substantially more boards with at least 30% women directors. Further, the number of companies with female chairs has grown from 37 to 40 during the past year, including nine newly appointed in 2022.

Repeat offenders and the “exclusive” mentality

The number of ASX 300 boards with no women has stabilised, with a sizeable proportion of “repeat offenders” in the resources sector. Fortunately, though, this is likely to change as more women pursue careers in the resources sector, which was traditionally the domain of men.

However, we have seen that as some repeat-offender boards fall of the list, they are replaced by new boards without women, showing a stabilisation in the gender metrics on this count, but change is inevitable.

The overall talent pool of women directors continues to grow steadily – current data (2022) shows 55 women leaving boards and 105 joining – a net increase of 50 female directors.

This positive increase has been offset by that stubbornly unchanged “exclusive club” effect. In the current period (2022), just 19% of all female directors prepared to serve on boards hold 46% of board seats occupied by women. And the most experienced and prominent female directors continue to collect a disproportionate number of board seats, relegating many newcomers to single-board status.

It emerged in the early stages of the rise of more women to board status that some organisations wrongfully believed there was a shallow pool of potential women candidates for board appointments. Why was that the case when – even then – highly educated, keenly competent and confident women were represented at all levels across most industries?

The basic reasoning for this inaccurate belief was that organisations favoured “ready-made” candidates. That is, people with a depth of c-suite experience and (perhaps) some board experience – for example, serving on boards of for-purpose organisations.

This misrepresentation meant women with seemingly less-compelling credentials than some men were overlooked – even though these women had no lesser ability to contribute at board level. Arguably, this issue was only publicly addressed as recently as 2019, when the appointment of two women to the board of an ASX-listed company was announced as the “milestone” moment the ASX finally met its gender target.

What now?

Over the last couple of years there has been a significant uplift in organisations and professional service firms injecting greater urgency into their efforts to tackle gender imbalances, as they aim to create a more sustainable talent pipeline, gain a competitive edge, and attract a diverse talent pool.

At Watermark, we have experience in working alongside a select group of organisations at the forefront of diversity strategy. In partnership, our clients are achieving real measurable outcomes within their boards and senior leadership teams. Further to this, Watermark continues to advocate for broader representation as it pertains to diversity through our Annual Board Diversity Index for the ASX Top 300.

The combination of this experience and insight, supported by an all-female research team, ensures we engage in a manner that affords us board and senior level engagement and the candidate a genuine audience. 

If you and your organisation are looking for exceptional talent, we'd like to help - please don't hesitate to contact us.