The 30% Club Australia is calling on the investment community to engage with boards on the issue of diversity as the pace of female appointments slows.
The 30% Club Australia is campaigning for 30% women on ASX200 boards by the end of 2018. Their call comes as shareholders consider annual reporting ahead of the AGM season.
“This call comes at a time when more and more global and Australian investment managers and asset owners are signing up to the Statement of Intent for Investors,” said Susan Roberts, chair of the 30% Club Investors Working Group. “It is heartening to see that the investment community and shareholders are increasingly looking closely at the ESG and ethical aspects of how listed companies are running their boards and how they are configured. Large super funds and investment managers are becoming increasingly concerned about board diversity and actively engaging with management to accelerate the change in boards.”
Companies that have already signed the Statement of Intent including Aberdeen Asset Management, AMP Capital, Australian Ethical Investment, Blackrock Investment Management (Australia), CareSuper, Cbus, Colonial First State Global Asset Management, Commonwealth Superannuation Corporation (CSC), First Super, HESTA, Hostplus, IFM Investors, Principal Global Investors (Australia), State Street Global Advisors (SSGA), and VicSuper.
The Australian Council of Superannuation Investors (ACSI) last year informed ASX-listed companies without female directors that they will face votes against sitting directors as of this year. In 2015, ACSI adopted a target for women to comprise 30% of ASX200 boards by the end of 2017, and that policy is now backed by a formal voting strategy for company AGMs.
But the rate of female appointments to ASX200 boards has slowed in 2017.
“The recent Australian Institute of Company Directors’ Quarterly Gender Diversity report showed that the monthly rate of female appointments to ASX 200 boards declined from 44% in 2016 to just 30% in 2017,” said 30% Club Chair Patricia Cross. “This is a very disappointing result. I think there is conscious bias in terms of how we put our boards together and that becomes very clear from some of the 30% Club research when chairs and board directors talk about fit and style. There is a real aversion to putting people on boards they perceive will not be part of that fit.”
“I also believe that the myth of merit is alive and well and more work needs to be done on how diversity matters rather than why diversity matters. There is a lot of research that points to the correlation between female representation in leadership and board, and return on equity or performance of companies. Research is done in various ways but the overwhelming conclusion is that diversity matters in producing better results.”