In other words, heed what ACSI says.

On 5 February ACSI said something new. ACSI launched an initiative, aiming to have women comprising 30% of all boards in ASX 200 companies within the next three years – a short but, ACSI believes, achievable timeframe. The issue will be a key priority of ACSI’s engagement with ASX 200 boards in 2015, with a focus on the “alarmingly large” number of companies without a single female director.

Women now represent 30% of all new appointments to the boards of ASX 200 companies – compared with 5% in 2009. By the end of 2014, women were occupying almost 300 seats in ASX 200 boardrooms (19.3% of all directors), which was a more than doubled presence since 2010.

While ACSI certainly had an input into this improvement, it was the dedicated effort of the Australian Institute of Company Directors and its members, especially those on the boards of the largest companies, that mostly explains this stunning turnaround.

But ACSI is concerned that the rate of women appointments to S&P/ASX 200 boards appears to be plateauing at around 30 per cent (based on AICD figures). As at February 2015, almost half of the companies in the S&P/ASX 200 index have one, or fewer, women at board level. There are 36 companies – including one in the ASX 50 and another three in the ASX 100 – that have no women on their boards.

There are many who doubt the achievability of this goal. Even ASX 20 companies currently average only 24% so to get to 30% by 2017 is probably unrealistic. The task gets more difficult the further down the ASX listings you go, with boards in the ASX 100 to ASX 200 range only having 15% women directors. Keep in mind that the opportunity for board change comes from director resignations. Of these resignations, 16% are women. 

In 2015 ACSI will be asking the S&P/ASX 200 laggards on gender diversity to explain how they aim to address the issue in the near term. In the worst cases, ACSI may recommend that its member funds vote against re-election of directors in those companies. In pursuing their diversity goals, chairmen need to be aware that one woman on the board is not considered by ACSI as a ‘job done’. And having no women on the board, according to their press release, means ACSI will be “wondering about the fitness of company chairs that have not yet been able to find an appropriately skilled woman to appoint.”

The guidelines issued by both CGI Glass Lewis and ISS require those organisations to take into account diversity and the diversity report when deciding on their recommendations for votes for chairmen and nomination committee chairs. However, the ACSI announcement of a goal combined with a proxy guideline has an ominous tone to it.

ACSI did not accompany their announcement with initiatives to expand the diameter of the pipe that feeds the pool of available directors from which women can be sourced. There are some good arguments being put forward by stakeholders that investors and proxy advisers could do more to facilitate this (see a point of view from director attending our forthcoming Perth Forum HERE).