Back in 2015, the Australian Institute of Company Directors issued a challenge to the ASX 200 to meet a target of 30% female representation on their boards by the end of 2018. Results are in, and they came painfully close to achieving that goal, with women accounting for 29.7% of all ASX 200 board positions at the end of 2018.
While 30% might not seem like a very ambitious target, the trends reported in the AICD September December 2018 quarterly report indicate that there is hope yet for gender parity in Australian boardrooms. Some particularly hopeful statistics that came out of the report include:
- ASX 200 boards with more than 30% female representation more than doubled, from 40 to 96 boards.
- There are only 4 ASX 200 companies with no female directors (down from 26 boards in 2015).
- Of those companies that didn't make the cut, 78 need just one more female director to reach the 30% target.
Before we get carried away, let's look a little closer. We still think 50% female representation is a more appropriate target and we have doubts around how widely ASX 200 companies are looking when recruiting female directors. While the AICD boasts that 70% of female directors hold only one board seat, there are 9 directors who hold 4 different board seats on the top 200 ASX listed companies (the most held by any director) and 8 of them are women.
While it is true that the top 200 ASX listed boards are progressing, the Chief Executive Women's 2018 Consensus shows only 7% of CEO roles in the top 200 listed companies are held by women, while the rest of the c-suite hovers around 12%. Given executives and executive directors have a higher level of engagement and greater commercial decisionmaking responsibilities than non-executive directors, we suggest more emphasis should be placed on increasing numbers at an executive level so that there is more substantive and meaningful female board engagement across companies.
We're also concerned about the targeted focus on the top 200 listed companies considering the largest disparity exists in the less-resourced small cap companies. Female representation in the ASX 201-500 companies sits at less than 16%.
While the AICD's figures demonstrate a move in the right direction, we also think there are plenty of areas to improve. It's time to shine a light on small cap and private companies who also need guidance and support in diversifying.