Women in the boardroom surge by 60% in five years — but glacial change on cultural diversity: New report
The number of ASX 300 companies with one or no female directors has halved since 2016, as the number of women on boards surged by 60%, a national report measuring five types of diversity has found.
The Board Diversity Index, released today by Watermark Search International and Governance Institute of Australia, put five types of diversity under the microscope, examining gender, cultural background, skills, age, and tenure and independence.
The national report examined 300 organisations and more than 2000 board seats.
As well as an almost 60% increase in the number of board seats occupied by women in the last five years (633 in 2021, up from 399 in 2016), the report also found the number of boards with at least 30% women has tripled, up to 161 in 2021 from 54 in 2016.
Boards with no women have decreased from 59 in 2016 to 14 in 2021.
Governance Institute CEO Megan Motto said the rate of change on gender diversity uncovered in the Board Diversity Index is significant for Australia’s boardrooms.
“On this current trajectory there will be no ASX 300 companies without a female director by 2026, and gender parity achieved in the boardroom by 2030,” Ms Motto said. “These milestones, while well-overdue, will be truly momentous and we urge companies to ensure they keep up the positive action and strategies.”
Watermark Search International’s Managing Partner David Evans said while the trends on gender diversity are positive, cultural change in the boardroom is moving at a much slower pace with 90% of directors of Anglo-Celtic or European background.
“The report highlights that Australian boardrooms remain dominated by those of Anglo-Celtic and European ethnicity. Based on current trends, it will take 18 years for the boardroom to be reflective of Australia’s cultural diversity,” Mr Evans said.
Other key findings include:
- Education: The report found that women are studying harder to reach the boardroom, outstripping men in virtually every category of qualifications. It found 8.4% of female board members having a PhD compared to 5% of males. And 22.1% females have an MBA, compared to 16.9% of males.
- Skills: Those with technology, healthcare and property experience are starting to entrench themselves at board level, and while accounting and financial skills are still the most prevalent, they have decreased from 39% to 34.4% among board members.
- Age: A male director on average continues to be slightly older than his female counterpart. The average age of directors is about 60 years, and there is a much higher proportion of women directors under 50 than men. The average age range for an ASX 300 board is around 19 years. The youngest director is 27 and the oldest is 89.
- Tenure: Around 65% of directors and 72.5% of chairs have tenures less than 10 years. It has become quite rare (2.9%) for a director to serve more than 14 years on the same board. Longevity on boards is more closely correlated with men than women.
- Independence: Listed boards are substantially independent — at the very most, one in five directors are regarded as non-independent.
Mr Evans said the breadth of the data in the report provides meaningful analysis of where corporate Australia currently stands on diversity, the direction it is heading in — and what else needs to be done.
“The Board Diversity Index offers organisations valuable insights into trends in Australian boardrooms — but it also delivers a roadmap for continued improvement. Organisations can use this report to drill down into these key issues and see where further work may be needed.”
Ms Motto said greater diversity is not just reflective of broader society, but it is also better for business — and organisations need to pay close attention as pressure continues to build.
“We are seeing investors and other stakeholders increasing pressure on companies to be more reflective of the community within which they operate. Consumers are increasing the pressure, choosing to spend their dollars with diverse organisations which can demonstrate strong ethics and good culture.
“Internationally, we are seeing countries list diversity as a reportable benchmark for companies and firms are starting to link executive remuneration to diversity targets. Momentum is gathering and organisations really need to be on the ball.”
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Media contact: Hannah Edwards 0403 024 149
Founded in 1979, Watermark Search International is one of the longest established Australian executive search firms. We have three key offerings across: Board Appointments, Executive Search and Interim Management. Trusted for over 40 years, focused on the future. Watermark Search International is a firm that combines the best of pedigree with a contemporary approach to executive search.
A national membership association, Governance Institute of Australia advocates for a community of 40,000 governance and risk management professionals, equipping our members with the tools to drive better governance within their organisation. As the only Australian provider of chartered governance accreditation, we offer a range of short courses, certificates and postgraduate study to help further the knowledge and education of the fast-growing governance and risk management profession.