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Why are some groups of Australians ‘under-represented’ or ‘marginalised’ on ASX300 boards?

​When reviewing the makeup of boards for the Watermark 2024 Board Diversity Index we found it very difficult to gauge the participation of people with disabilities on boards because there is limited data. Meanwhile, LGBTQ+ board appointments are slow coming. In general, there has been little improvement in the stubbornly low number of board seats occupied by people from frequently under-represented groups.

Criticism fair and square: we need to be more representative

In 2023, authors of the Purpose at Work Director Pathways Project - an investigation of the experiences of Australian directors with disabilities rightly called out Watermark Research International, among others, for not being fully representative.

It was levelled that: “The Australian Institute of Company Directors (AICD) (2022) Gender Diversity Index for ASX300 companies is limited to gender. The Watermark Search International/Governance Institute Board (2021) Diversity Index for ASX300 companies is broader in scope, but only reports data on gender, cultural background, skills and experience, age, tenure and independence… To the extent that there is information on Australian directors and executives with disability, it is patchy.”

Watermark Search International can report its 2024 Board Diversity Index addresses this, however data is limited.

Working hard to find the facts

Although some NFPs, small businesses, charities and support organisations include people with disabilities on their boards, there appears to be zero people with disabilities on ASX300 company boards – a fact confirmed In February 2024 with Alan Hough, co-author of Purpose at Work report who told us: “We put considerable effort into trying to find them, using all the networks we could”.

While the ASX itself has a formulated diversity and inclusion policy – as do many ASX300 listed companies – people with disabilities are just not being included on those companies’ boards.

In the modern era of acknowledging and incorporating diversity, it’s fair to ask why this is so, especially given the statistics of people with disability in the Australian population:

  • More than 4.4 million people in Australia have some form of disability. That’s 1 in 5 people.

  • 17.8% of females and 17.6% of males in Australia have disability.

  • 2.1 million Australians of working age (15-64 years) have disability.

Why are there so few people with disabilities on boards?

Many companies acknowledge and embrace people with disabilities in their employment initiatives, but the report reveals the pathway to directorship is littered with obvious and hidden barriers.

The main criterion for a person being first appointed to a board of a large for-profit organisation is having had C-suite or other executive experience in a similarly sized organisation. As people with disabilities are not in large numbers in this traditional “feeder” group, it limits their number on company boards. The notion of “ableism” is also a barrier to progress for people with disabilities.

Other barriers included the lack of practical support and accessibility to board materials required for their roles, indicating a considerable amount of attitudinal shift is needed for the path to clear. The good news is, making companies aware of why they should have people with disabilities on their boards helps remove those barriers.

Including people with disabilities on boards is a good move

The case for including people with disabilities on boards is wide ranging. A company embracing true inclusion could even see it win the war for talent. Not tapping into the talent of around one in six Australians could be a missed opportunity.

The “broad church” argument also carries weight. By increasing board diversity, open communication and mutual understanding, different approaches to decision making provides more avenues to analyse problems and reach stronger resolutions. People with disabilities have been found to be lateral thinkers because they practice problem-solving skills in their everyday lives.

Internationally, governments in Britain and Canada have initiated moves to create definitive pathways. Australian governments have also attempted initiatives, which are often state-based. Again, information is sketchy because some of these programs are still in progress and some that have concluded have not disclosed their results, or revealed only minimal success. There is a long way to go.

LGBTQ+ visibility and inclusion on boards

Back in December 2022, ASX200-listed Woodside Energy, a global energy company founded in Australia and a strong supporter of inclusion, diversity and reporting statistics, revealed 9% LGBTQ+ representation at the board level. That’s one company.

In 2023, The Australian Association of LGBTQ+ Board and Executive Inclusion (ALBEI) found a slight increase in LGBTQ+ community members reported on boards, although we need to be mindful this is likely to be more from self-disclosure than an improvement in overall representation.

At the board and C-suite level there is often disinclination for people to self-disclose whether they are members of the LGBTQ+ community, have a working class background, or a disability. This suggests Australians still face cultural issues in admitting “difference”. Until we reach a point where disclosure is comprehensive and unremarkable, it will be difficult to truly see whether boards are genuinely inclusive.

Mark Baxter, co-founder of ALBEI, challenges boards to recruit talent from outside the usual circles of influence and Watermark Search International supports this.

Reporting diversity in general terms

In the last year there has been little improvement in the stubbornly low representation of under-represented groups across the ASX200 – and several groups are only represented through self-disclosure.

Only two companies in the ASX200 report extensively on the diversity of their own boards across LGBTQ+, race, cultural background and First Nations, Woodside Energy being one. The other, Block Inc (incorporating Afterpay) is a company that is jointly listed on NASDAQ and the ASX and therefore needs to also follow NASDAQ listing rules which have requirements relating to minority groups and reporting.

These companies show that such reporting can be done. But research by ALBEI has unearthed a resistance to collect this data at board level as it is “personal” and “sensitive”. This view is out-of-step with developments in the UK and the US where regulators are proposing collection and disclosure of board-level diversity.

With increased data collection and reporting requirements in the UK, some companies and boards are using this as a role modelling exercise. This is opposite to the general approach in Australia where the data collection and disclosure is resisted ‒ except for the two noted examples.

Companies must broaden their concepts of diversity and avoid concentrating on one aspect of it, otherwise they risk missing out on talented candidates from under-represented groups.

Watermark Search International has extensive experience here: our board appointments services help companies look outside the box to broaden the diversity of their board, build new skills into the board and conduct successful onboarding for new directors. We look forward to sharing our expertise with you. Contact us here.

Download a copy of the 2024 Board Diversity Index here.