The percentage of women on ASX200 boards has risen to 13.9%, but it is the state-owned corporations of Queensland and South Australia that have the highest representation of women on boards, with 38.4% and 49.1%, respectively, according to the latest Women on Boards (WOB) Boardroom Diversity Index (BDI).
While the BDI found incremental progress on ASX200 boards, 64 ASX200 companies do not have a woman on their board. Furthermore, of the ASX201-300 companies, only 7.6% of companies are held by women. The BDI tracks the representation of women on the boards of 850 Australian organisations, and the most recent index is based on data current as of January 2012.
The ASX200 has shown the highest level of percentage increase of appointments of women across the BDI. In 2008, women were 8.3% of board appointments, and increased 5.6% by 2012. Other sectors showing growth included credit unions, of which 21.2% of directorships are held by women, up from 18.4% in 2011. Women also comprise 21.8% of directorships on superannuation fund trustee boards, an increase from 20.4% in 2011. Corporate superannuation fund increased their representation of women on boards by 5% over 2011, with retail funds showing a smaller increase, but industry and public sector funds have shown declines in the percentage of trustee positions held by women, the BDI found.
“[The index] shows that some sectors are having a look at the issue [of gender diversity,” said Claire Braund, a WOB director. “There is a clear indication that credit unions and superannuation funds are looking at this, particularly the corporate superannuation funds. But don’t forget that [the Australian Prudential Regulation Authority] APRA are regulating the sector quite hard now. With the new governance requirements from APRA vis a vis governance comes the need for board succession plans and board tenure plans. All these issues address the turnover of boards, and that brings up the issue of representation of women.”
The high percentage of women directors on boards of the Queensland and South Australia state-owned corporations is down to the fact that the state governments in previous years have set targets for women, Braund said.
“[Former Queensland State Premier Peter] Beattie set a 40% target for women on board of state-owned corporations when he was in power,” she noted. “South Australia also has a target, and now the federal government has set 40:40:20 targets for their boards and committees, which means they will have to pay attention to governance and diversity of the board as well.”
ASX-listed companies will now have to report on their progress on meeting gender diversity standards in the revised ASX Principle 3 of the ASX Corporate Governance Principles and Recommendations. ASX-listed companies are required to report against the revised Principle 3 in the first annual report after 1 January 2011, or by their 2012 report. Meanwhile, legislation is working its way through Parliament to have similar reporting standards for all companies with more than 100 employees. As a result, WOB has received calls from companies, particularly smaller listed companies, with questions on how to address these issues.
“I’ve had calls from two mining companies, telling me that they need to make changes, basically,” Braund said. “The big issue for them is how they report. We’ve convened a Principle 3 standards committee to help develop a diversity reporting standard.”
Braund warned that going forward, increasing board representation for women will require companies to broaden their criteria for board membership.
“I think what’s happened is that all the easy gains have been made and it’s going to get tougher,” she said. “If you look at the ASX50, it’s at 20% representation. It’s the ASX100-plus where things get harder. It means broadening their definition of what a good director can be. In the listed mining sector, for example, you get small listed companies that think you have got to have mining experience to be a good mining company director. Often, they still haven’t moved on from the people who were on the board at IPO.”