While some of the representative numbers in our current Board Diversity Index show little movement, it’s clear the business world is increasingly aware of the importance and value of diverse representation. The world is changing, after all, and as more barriers fall, Australia needs to evolve in its outlook to maintain a competitive place in it.
Please click here to download Watermark's 2023 Board Diversity Index.
When we began our index almost a decade ago, we boldly thought we were venturing into dimensions previously unexamined and unmeasured. We were determined to promote the case for true diversity on Australian boards, perhaps for the first time. Yes, gender diversity is fundamental, and so, too, is representation of people with points of difference, such as ethnic backgrounds skillsets, age ranges, board tenures and independence.
In a short span of time, the make-up of the business world has evolved. Minority groups are coming forward to promote the benefits of their inclusion and explain why it’s vital they take part in a proactive way.
But progress is inarguably slow.
Measuring and advocating change
It has been thoroughly noted that the progress of women in the boardroom has been impressive, but belated. When 50% or more of the population speaks with a concerted voice, we all listen, so advocacy is a fundamental cog in the wheel.
But the challenge facing minority groups is much more daunting.
The Diversity Council of Australia’s inclusion@work index 2021-2022 lends some strong across-the-board support for diversity and inclusiveness – to both visible and those currently not given representative value.
The index found that 78% of Australian workers support or strongly support their organisation taking action to create a diverse and inclusive workplace, and workers in inclusive teams are 10 times more likely to innovate than workers in non-inclusive teams.
To add further positive outcomes regarding diversity, McKinsey and Company’s 2020 Diversity wins: How inclusion matters report revealed there is a 48% differential likelihood of outperformance by companies with 10-30% women executives compared to companies with fewer or no women executives. Adding more weight is that the report also found that there is a 36% difference in profitability between US companies whose leadership teams ranked in the top 25% for cultural diversity compared to companies with low cultural diversity.
Reflecting the invisible
Mark Baxter, Co-founder of the Australian Association of LGBTQ+ Board and Executive Inclusion (ALBEI), says that Australian boards have become used to sharing data on five of the key aspects of diversity (as reported by Watermark), they are: Gender, cultural background, skills/experience, age and tenure/independence. These aspects are, after all, relatively easily measured, monitored and placed into reliable data.
“But what should be done when other diversity characteristics of a population aren’t measured?” asks Baxter. “Or if some data exists, it’s not accurate?”
And to prove the point, ALBEI data reveals how important statistics are lost on the radar. Consider these findings: out of a total of 1464 ASX 200 directors, 12 identify as LGBTQ+ and two as First Nations. Other jaw-dropping revelations showed that there was no data on those who identified as disabled and none on those who identified as working class.
Baxter warns against assuming that because some minority groups aren’t counted, they aren’t experiencing problems with representation and asks if data should be collected to develop an accurate picture and evidence base for representative inclusion.
Baxter is involved in research into the diversity of boards, focusing on under-represented groups, such as First Nations, LGBTQ+, people with disability and people from lower socio-economic backgrounds, and he stresses the need for reliable research and data.
“The data we have collected so far hints at some diversity challenges, but without dedicated central data collection it can only be approximate,” he says. “What our research does show is that certain groups are extremely under-represented in the senior leadership levels in corporate Australia.”
To learn more about diversity on Australian boards, please download our 2023 Board Diversity Index here.