As the next step in its long-running effort to improve gender diversity in boardrooms, the Australian Institute of Company Directors (AICD) is urging S&P/ASX 200 companies to ensure that 30% of their directors are female by the end of 2018. It supports this goal based on research demonstrating a positive link between the level of female representation on boards and improved corporate performance.
The goal of 30% echoes that of the Australian Council Of Superannuation Investors (ACSI). However, the AICD is more realistic in allowing an extra 12 months to achieve the 30% goal. ACSI’s policy also recognises “… the strong evidence of the links between board gender diversity and financial performance”. See our comments on the ACSI announcement HERE.
The AICD wants all boards to adopt the target and regularly report on their progress towards it so that the results of this initiative can be transparent and monitored by stakeholders. This is already happening, as it is a requirement in the ASX Corporate Governance Council’s guidelines (See HERE, plus our comments on the guidelines HERE).
The AICD is encouraging all boards to meet the 30% gender goal but has not set a specific date for smaller listed and unlisted companies to achieve the target.
The AICD believes companies should set their own measurable targets for gender diversity and sees the 30% target as an appropriate standard to facilitate their efforts, on the basis that it is better for the director community to set its own 30% target than to have a mandated quota imposed by government.
The AICD has long recognised the importance of expanding the pipeline of female board candidates and has introduced a range of practical activities that have made a significant contribution to increasing the number of women on boards.
Figures published by the AICD show that –
- The number of female directors on ASX200 boards has increased from 8.3% in 2009 to 20% today.
- As at 31 March 2015
- Women held 23.3% of directorships in the both the ASX 20 and the ASX50 and 23.4% of directorships in the ASX100
- 34 ASX 200 boards had no female directors, compared with 87 in June 2010
- All ASX20 boards have at least one female director
- 4 ASX100 and 2 ASX50 boards had no female directors
- The percentage of females among new director appointments to ASX200 boards increased from 5% in 2009 to an average 30% in 2014.
- Women have made up 25% of new appointments to ASX200 boards to date in 2015.
- Women chair 12 ASX200 boards, up from 5 in 2010.
However, as we heard discussed at the recent Remuneration and Governance Forums, investors could do more to expand the pipeline of potential female and minority directors by removing the pay discrimination that exists between executives and non-executive directors (see HERE and HERE).
The AICD’s media release and key fact sheet can be seen HERE.© Guerdon Associates 2021 Back to all articles