With no shortage of talented women in Australia, why do the country’s top corporates struggle to gain gender parity on their boards?
The latest Gender Diversity report from Australian Institute of Company Directors (AICD) identifies that more than 60 of the ASX200 are yet to reach even 30 per cent of women on their boards.
While the overall figure of women representation on ASX 200 Boards is the highest level of gender diversity to date, at 34.5 percent, this is not consistent across all member companies. In fact, the gender diversity shrinks the further out from the top corporates you go – while there are 66 ASX 200 boards that haven’t reached 30 per cent target at an individual level, it increases to 127 when you include the ASX 300 boards.
AICD CEO and Managing Director, Angus Armour, claims there is progress in the right direction, but it is slow and may be hindering company results.
“Gender parity at board level is the goal, and we urge boards to consider every appointment an opportunity to shift towards a sustainable model of equality”, Angus said.
“We know that diversity in its broadest sense will deliver the greatest outcomes for boards, and gender diversity is just one measure of how a board achieves diversity through its composition.”
The impacts of under-representation of women on boards has been well-documented in recent years.
For example, the 2020 Gender Equity Insights report from the Workplace Gender Equality Agency and the Bankwest Curtin Economics Centre (BCEC) shows that more women on boards and in senior leadership positions drives better company performance, greater productivity, and greater profitability.
The research found that an increase in the share of female ‘top-tier’ managers by 10 percentage points or more led to a 6.6 per cent increase in the market value of Australian ASX-listed companies, worth the equivalent of AUD$104.7 million.
Report co-author and BCEC Director, Professor Alan Duncan, said greater female representation on boards is better for business.
“We found that an increase of 10 percentage points or more in female representation on boards led to a 6.0 per cent increase in the likelihood of that company outperforming its sector on three or more performance and profitability metrics,” Professor Duncan said.
“Increasing the talent pool and taking into account the experiences and views of a broader group will ultimately lead to better decisions.”
So why the lag? Is it possible that boards and Directors don’t think there is an issue to be addressed?
The 2022 Director Sentiment Index published by AICD records that only 58 per cent of Directors think the current level of diversity on Australian boards is unsatisfactory.
When asked to identify the top challenges your board faces in recruiting, the leading result from the Index was a lack of appropriate skills in potential candidates (59 per cent), while the fourth highest ranked challenge was meeting diversity requirements (39 per cent).
Is it possible that struggling to find people with the right skills, and having trouble meeting diversity requirements might be correlated? The Index doesn’t dive into this relationship, but one can’t help but wonder if there are behavioural and cultural issues at play in this dynamic.
Finally, it is worth noting the Director Sentiment Index is conducted by independent researchers, Roy Morgan. And for this Index, 72 per cent of the 1737 respondents were male, and 90 per cent were over the age of 45.
These statistics and research provide further proof that we need to do more to impact the opportunity for women in strategic decision making, including at the board level.
To achieve Gender Parity, rather than Gender Parody, we must create a new conversation. A conversation led by those who want to participate, deliver impact, and bring their skills to bear, rather than from the perspective of those already empowered.
Access the full reports here:
Gender Diversity Progress Report Diversity to support future challenges (companydirectors.com.au)
Director Sentiment Index H1 2022 Director sentiment falls amid global economic uncertainty | Director Sentiment Index 1H22 (companydirectors.com.au)
Gender Equity Insights 2020 Women in leadership positions improve business outcomes | WGEA