The latest Director Sentiment Index from the AICD has revealed 58 per cent of directors consider the current level of diversity on Australian boards to be ‘satisfactory’. The survey of more than 1700 directors, compiled by Roy Morgan, found only a quarter of people asked were not satisfied with the level of diversity on boards.
The survey - which was conducted online with a representative sample of 1737 respondents across Australia between 24 February to 10 March, 2022 - found that increasing board diversity remains a focus for most boards, with the primary focus on increasing skills diversity (and enhancing tech skills in the boardroom). Here are some more of the findings in detail:
Board skills diversity
- 73% of boards are seeking to increase skills diversity.
- 58% of directors indicated their board is looking to increase their boards' digital capability.
- 56% consider their board also has an 'appropriate technology strategy and agenda'
- 29% of directors consider their boards' oversight of cyber threats to be insufficient.
Gender, ethnicity and age diversity
- 51% of directors indicated their board is seeking to increase gender diversity.
- 40% of boards are seeking to increase ethnic diversity.
- 37% are looking to increase age diversity
- 44% indicated that they face challenges in recruiting talented new directors.
- Meeting diversity targets was one of the top four challenges boards face in recruiting directors, after finding candidates with the right skills (59%), finding candidates comfortable with the required time commitments (50%), and legal compliance and burden (44%).
Economic uncertainty and climate change
The survey found that director sentiment fell 7.1 points from 17.9 to 10.8 since the last survey in December, amid global economic uncertainty.
Labour shortages have increased again as a top economic challenge facing Australian businesses with 60 per cent of directors nominating it, followed by global economic uncertainty and climate change.
The survey also found more than 70 per cent of directors support the establishment of a federal anti-corruption watchdog.
The Index reveals that 57 per cent of directors believe Australia’s economic health is strong now and will remain strong in 12 months’ time.
Other key findings:
- Directors identified cybercrime and data security as the number one issue keeping them awake at night.
- Skills shortages were again chosen as the second most important short-term priority for the Government to address, but when taking a long-term perspective, directors chose an ageing population as the second biggest issue over the next 10 years.
- Western Australian directors remain the most bullish about their state’s business prospects, with 78 per cent certain conditions will remain strong next year.
- NSW had the biggest shift in sentiment, with confidence about business conditions over the next 12 months dropping 19 per cent this survey.
- 63 per cent of directors surveyed believe China’s economy is strong, up from 47 per cent last DSI survey.
- Less than one in five directors perceive the European economy as being in a strong position now, or in 12 months’ time.
According to the latest AICD gender diversity report there were 34.5% women on ASX 200 boards and 33% women on ASX 300 boards.
Download the AICD Director Sentiment Index Survey (1st Half 2022) here.