Although many European countries have laws that promote 40% female directors on boards of stock exchange listed companies, in Australia, the ASX top 200 companies cannot even reach the target of 30%. The Australian Institute of Company Directors (AICD) released its latest report on 23 April for data up to 31st March 2019. This showed that female directors only account for 29.5% of all ASX200 board positions. The CEO of the AICD, Angus Armour said “the results are disappointing”. Judith Fox, the CEO of the Australian Shareholder Association went further and said “the drop was probably due to the same old issues”. The AICD set a target of 30% female directors in 2015 9and this is similar to a target set in the UK) but there has been very slow progress to this minimalist target. During in 2018, there were actually 45.4% of female directors and some of the consequences of the Royal Commission into Banking Misconduct saw an exit of female directors. There are still four companies with no female director at all and 50 who have a single female director. Mr Armour noted (and I agree with his observation) that “diverse boards help prevent group-think, leading to better outcomes for shareholders, consumers, employees and the community. They promote greater innovation and improved bottom lines”.
Professor Adams conducted research into the broader diversity debate on boards (more than just the gender issue) and this was published in the Deakin Law Review.
The 2019 4th edition of the ASX Corporate Governance Council Principles requires full disclosure in the annual report or other relevant place for the diversity of the listed companies boards and what strategies to make changes for the future.
The slow rate of change should change the debate from a target to a formal quota of 40%, Professor Adams’ asserts.