Proxy adviser, Ownership Matters, reviews ASX 300 Director gene pool

Ownership Matters has released its recent research and analysis into the composition of ASX 300 boards over the past fifteen years.

The gender diversity findings of the research include:

  • Forty percent of all serving female directors accepted an additional appointment in the last three years compared to 17.5% of all male peer directors (with the additional appointment likely to be at a smaller cap company)
  • Five percent of all women directors have four or more ASX company board seats compared to 1.18% of males
  • Despite the proportion of female directors across boards being close to 30%, only 7.3% of ASX 300 companies have a female chairman
  • In each of the last ten years the annual turnover of female directors has exceeded male directors
  • the proportion of NED seats occupied by men, who have been in the position for greater than 10 years greatly outnumbers women in a ratio of 9:1.

The average number of non-executive board seats on ASX 300 companies has increased from 4.9 in 2005 to the current level of 5.9 today. This may be a reflection of the considerable increase in governance standards and regulation.

The research also observed that non-executive director tenure appears independent of company performance and professional directors seem to become rusted on. Findings included:

  • Boards of underperforming companies refresh themselves only slightly faster than boards of other companies.
  • Since 2005, 38.2% of ASX 300 vacancies have been filled by directors who already serve on an ASX300 company
  • The more positions a director holds on the ASX 300, the more likely they will hold them longer.

The Ownership Matters report highlighted that boards clearly prefer known candidates (similar to what was found in a recent CEO appointment and pay study HERE), and that investors support these candidates at AGMs.

The Ownership Matters report also provides an interesting discussion of the issues. Why, for example, are shareholders reluctant to vote off directors in underperforming boards? Why is the pool of women from which directors are selected not growing as fast as the opportunity for women to be ASX 300 directors?

The report is well worth a read. See it HERE.

For related articles examining the challenges finding experienced NEDs in our relatively small market, see HERE, HERE and HERE.

© Guerdon Associates 2024
read more Back to all articles