WOB welcomes ACSI voluntary target becoming 'mandatory' but focus should be 40%

Women on Boards has welcomed the Australian Council of Superannuation Investors’ decision to move from its 10-year voluntary target of 30% women on ASX300 boards to making this a minimum expectation under the new policy.

The new voting policy takes effect from July 2023 and extends to the ASX201-300, in which women now hold 31% of board seats. 

Claire Braund, Executive Director of Women on Boards, noted that the more acceptable target of 40% women on boards which has been achieved across many sectors and advocated by WOB since 2009, is really where the ASX300 (and indeed, the all ordinaries) should be in 2023.

"It is good so see groups with clout (like ACSI) put some real pressure on the serial ASX underperformers when it comes to gender balance. Shifting the focus from 30 to 40% and cutting off the escape route for ASX companies who are 'nearly at 30%' so have 'all but' achieved the target' is an important step."

“The world and Australia have moved on from 30%. We appreciate WOB was an early mover in 2009, but 14 years later we would expect to see 40% as the norm for companies when it comes to representation of women on boards"

"Many other sectors had already achieved 40% by 2020, as shown in the 2020 WOB Boardroom Gender Diversity Index which measured 1,335 boards for gender diversity. The ASX201 - 300 and beyond remains the serial underperformer in gender balance on boards. "

ACSI CEO, Louise Davidson, said it was positive to see a significant shift towards greater board diversity in the ASX300. “For investors, this means boards are accessing a larger talent pool which provides more diverse skills and backgrounds to draw on,” she said.

“However, these averages mask a lack of progress in many companies, such as the 97 companies in the ASX300 which fall below the 30% mark.”

The new policy could see those companies facing recommendations ‘against’ male director re-elections if women do not occupy a minimum of 30% of board seats. ACSI and its members are also encouraging companies to develop a timeframe within which they will achieve gender balance (40:40:20) on their boards.

“Having 30% gender diversity on Australian boards has shifted from a target to aspire to a minimum standard. We have updated our policy to recognise market standards and support continued improvement. There’s a fair way to go – even in the top 200 companies there are still 54 who fall below 30%. Ultimately though, we hope that this policy becomes obsolete in the next five years as Australian companies build and maintain gender balanced boards,” Ms Davidson said.

“The old excuse was that there weren’t enough women with ‘appropriate’ qualifications, but Australian boards have dispelled that argument – so far this year, 45% of board appointments have been women.” 

In applying its updated policy, ACSI may recommend during the 2023 AGM season that its members vote against existing directors of ASX300 companies with poor gender diversity, with a focus on those most accountable for board succession and composition.

“We hope that by working with companies to drive change we will see further progress and commitments. However, recommendations will be made against companies which make no progress at all.”

ACSI has written to ASX300 companies advising them of the new policy.

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