CEO Memo: Board diversity study shows there’s still plenty of room for improvement
So what’s really going on inside Australian boardrooms?
A new report — the Board Diversity Index — has provided the latest insights on how diversity is playing out in boardrooms across the nation.
Examining six years’ of data and surveying 296 ASX companies, the report puts five key areas of board diversity under the spotlight: gender diversity, cultural diversity, skills diversity, age diversity, and tenure.
And the results of the study, that we have released in partnership with Watermark Search International, are fascinating — but also show there is plenty of room for improvement.
While there is greater gender diversity at board level for some organisations (with 561 of the 2004 board seats on the ASX300 now filled by women) the report also found that many companies joining the ASX in 2020 have less gender balance on their boards. Of the 156 board seats among the new players, only 24 of those were filled by women.
Skills diversity will be increasingly put under the spotlight during COVID-19 with many refocusing attention on further education as they fine-tune and skill up.
Skills diversity is also highlighted: Among ASX300 board members and directors, 4 per cent of men and 7 per cent of women have PhDs, and 17 per cent of men and 22 per cent of women have an MBA. Governance qualifications are held by 60 per cent of women and 41 per cent of men.
We know that further governance and risk management qualifications are highly valued in the boardroom — and so they should be. That an individual has dedicated the time, resources and effort to attain a qualification such as an MBA or PhD speaks volumes and adds a huge amount of value to a board.
Skills diversity will be increasingly put under the spotlight during COVID-19 with many refocusing attention on further education as they fine-tune and skill up to be best prepared for the post-pandemic working world.
We know that a diverse board is a key factor in promoting business resilience and with an increasing resistance to investing in companies with homogeneous boards, having a balanced board is also good for business.
There are plenty of insights and takeaways from this and we hope you find it of interest.
A momentous month
While the world continues to battle the impact of COVID-19, thankfully amid the negative news we are hearing many positive stories about how businesses have adapted, overhauled and refocused — which is very uplifting.
Like you, we at Governance Institute are firmly focused on navigating this new working world. We have changed how we deliver our courses and are continuously fine-tuning the content of our webinars, thought leadership, and policy and advocacy initiatives for maximum impact and relevancy.
In a sign of the shifting times, we held our first ever Virtual Governance and Risk Management Forum in May, with 35 external speakers livestreaming direct into the home offices (or bedrooms or loungerooms!) of 261 attendees.
We also held our first completely online AGM, attracting the highest ever AGM attendance. There were some technical glitches, but I don’t think we are alone in that respect — and we can certainly take away some important learnings from the experience. Check out our Q&A and the transcript from the night.
We have also just launched our virtual Town Hall event series, a chance for members to chat with me and President John Mazengarb. These events are complimentary and this online format — while adhering to current regulations on meetings — will also ensure all our members can participate, regardless of location.
We look forward to you joining us, and we hope you continue to stay safe and well.
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