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Diversity on boards is measurable – so where to from here?

​There seems to be a systemic bias against collecting data on underrepresented people. But lack of data should not be seen as an excuse for nominations committees and chairs to fall back on instead of actively seeking talented, diverse candidates for board positions, explains Mark Baxter, co-founder of the Australian Association of LGBTQ+ Board and Executive Inclusion.

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

Our research has shown that a lack of data about the diversity of an organisation’s leadership, workforce, board and customers means underrepresented groups risk being invisible – and therefore problems of representation aren’t fixed because they’re not identified.

This current lack of data is a smoke screen. If organisations are serious about diversity they’ll put effort into collecting better data, which will lead to improved KPIs, effective monitoring and accurate measurement of progress.

In an interview in Company Director magazine, Ben Wyatt – the first Indigenous director of an ASX board, former Western Australian Treasurer and current non-executive director – stressed the importance of visibility and accountability to promote positive outcomes.

“We know within each underrepresented group there are talented people who could take up board roles,” he said. “They just need to be identified… there are people around. You don’t actually need affirmative action on this, because if you look, you will find them.”

Who do boards really serve?

Boards need to reflect Australian society because their organisations don’t just represent shareholders – they also represent end customers and clients of these companies. Therefore, it’s not acceptable for boards to be stacked with overwhelmingly white, straight and upper-middle-class people while overlooking the many talented people in our community.

The line of logic is that an ethnically diverse board, for example, will have a better understanding of the population it serves, along with a diversity of problem solving and thinking styles, and a better appreciation of the mind-set of key trading partners. In contrast, directors with homogenous characteristics risk blinding boards to emerging expectations in the market about ethical behaviour, sustainability, workplace practices and discrimination.

There is enough data to show diversity at all levels of leadership improves business performance – and accountability – now we need to see boards become more representative of our diverse society.

When Australian boards broaden their outlook and open their hearts and minds to changes that are inevitable, the path forward will be smooth and successful.

To learn more about diversity on Australian boards, please download our 2023 Board Diversity Index here.