We all like to think that companies are managed carefully to maximise long term profits and returns to shareholders.
Surely, they wouldn’t be foolish enough to ignore half of the population in their quest for better returns?
However, that certainly seems to be the case, given the glacially slow promotion of women to senior executive and board positions in Australia, despite a mountain of research that shows that having women in key positions reduces risks, improves governance and – most importantly – improves investor returns.
That same research shows that companies with one or more female board directors outperform those with none.
All ASX 200 boards have at least one woman
At least Australia has just achieved one milestone in the past week, with every company in the ASX 200 finally having at least one woman on their board.
However, there is a very long way to go before enough women are promoted to senior executive positions and even this achievement is the result of a sustained campaign by investor lobby group Australian Council of Superannuation Investors (ACSI), among others.
The aim of having at least one woman on every board was finally achieved after female appointments to the boards of two of the last holdouts, Silver Lake Resources Limited (ASX: SLR) and Chalice Mining Ltd (ASX: CHN).
Still a long way to go
ACSI chief Louise Davidson welcomed the milestone but acknowledged that Australian companies still had a long way to go before achieving more optimal female leadership representation.
“The benefits of having more women in governance roles are well established and are being clearly recognised in boardrooms around Australia,” she said.
“More diverse boards make for better-governed companies, which is intrinsically linked to long-term shareholder value.”.
Women held just 8% of board seats in 2010
ACSI started the campaign back in 2010 – a time when incredibly only 8% of board positions were held by women.
The target was updated in 2015, a time when there were still 34 companies in the ASX 200 that had all-male boards.
The new target was for 30% of board seats to be held by female directors, something that has now been achieved by 126 of the 200 largest companies, with 15 companies having a majority female board.
“It’s important that we maintain the momentum for change and continue to increase both the number of women, and diversity of experience on boards,’’ said Ms Davidson.
ACSI is now campaigning for boards to plan to reach a balanced position on gender, which they define as “a minimum of 40% women, 40% men and 20% unallocated to allow flexibility for board renewal.’’
Push is on to get more women into senior executive roles
If progress on getting more female representation on boards has been slow, getting more female chief executives and senior executives has been even slower.
The chief executive of superannuation fund HESTA, Debby Blakey, has long campaigned for greater female representation in senior management roles and last year HESTA launched a 40:40 Vision campaign to reform c-suite positions among Australia’s largest publicly listed employers.
At that launch Ms Blakey said on current trends it would take 80 years before 40% of executive leadership was female.
“We see lack of gender diversity in leadership as a financial risk,’’ said Ms Blakey.
“Companies that fail to consider 50% of the population for leadership positions risk missing out on the best people, and the performance of the organisation will eventually suffer.”
HESTA has controversially also been active in pushing global sustainable development goals, targeting total portfolio cuts in emissions of 33% by 2030 and ‘net zero’ by 2050.