International Women’s Day underscores need for greater female representation on ASX boards

International Women’s Day ASX 200 company boards female directors
By mid-2018, ASX 50 and ASX 100 company boards had reached the 30% female representation target set by the 30% Club Australia.

As the world ushers in another International Women’s Day, it is important to look back at the progress women have made in the business world over the past 12 months.

In the Australian corporate world, 2018 heralded women making up more than 30% of boards on ASX 50 and ASX 100 companies for the first time.

Driving the push for more female board representation is the 30% Club, which arose out of the UK and is now a global movement.

The 30% Club Australia was established in 2015 and set about boosting ASX 200 female board numbers from 19.4% to 30% by the end of 2018.

ASX 200 companies women on board 2018
There are currently 96 ASX 200 companies that have reached the 30% target (as at 31 December 2018).

With this goal on track to be achieved in the coming month, the 30% Club Australia has firmed up a new target – this time for ASX 300 companies, which have average female board membership of only 19.7%.

Speaking with Small Caps, 30% Club Australia chair Nicola Wakefield Evans said ASX 201 to 300 companies now had the aim of reaching at least 30% female membership on their boards by 2021.

She added that there were still 28 ASX 300 companies with zero female board representation.

Ms Wakefield Evans said this target was certainly achievable and there was no reason not to do.

She said it also aligns with the ASX’s recently released corporate governance statement which also sets a 30% goal.

Additionally, Ms Wakefield Evans pointed out that after re-rating a lot of ASX 300 companies often shift to the ASX 200 category and will be subject to the 30% target anyway.

Female board members call for greater diversity

Global biotech company Zoono Group (ASX: ZNO) director and company secretary Elissa Hansen said all companies have a responsibility to their shareholders and this can be done by promoting and embracing board diversity, which is a key to success.

Meanwhile, Ellex Medical Lasers (ASX: ELX) company secretary and chief financial officer Maria Maieli said the ophthalmic medical device company had a number of women in management positions across the company and these were based on merit.

Despite research showing 30% was the magic number where true benefits of gender diversity are gained on boards, critics of this move remain.

Not enough skilled women

One frequently heard argument against this move is that there aren’t enough qualified women to make this goal a reality.

Ms Wakefield Evans said this was most certainly not the case.

“We actually think that part of the issue has been is that people aren’t looking hard enough.”

With companies that have achieved this goal, she said the board has looked more critically at the skill set needed and they’ve gone to executive search firms and asked them to source gender balanced lists.

She added women have also been previously often overlooked due to culture and gender-blindness.

“For a long time, a lot of chairs and senior executive teams have not worked with women.”

“It can be harder to find women, but I don’t at all subscribe to the view that woman don’t have the requisite skill set.”

This has been proven by the large jump in female board members since the 30% Club began its campaign.

“When we started in 2015, 19.4% of the roles were held by women,” Ms Wakefield Evans said.

She pointed out, at the time, there was also an “enormous” amount of companies devoid of any female representation on the board.

“We are now down to three companies with no female board members.”

“Almost every company on the ASX 200 now has at least one woman on the board,” she added.

Skilled men replaced with unskilled women

Another argument bandied about regarding the 30% board target is that lesser skilled women will be appointed to the board based merely on gender, rather than merit.

“I don’t think you could say that any company has appointed a woman just because she’s a woman,” Ms Wakefield Evans said.

As an example, many in the small cap space have said it is hard to source women with capital raising or equity raising experience.

“Again, that is not true.”

“In fact, the chairs of a number of audit committees are women.”

“It goes back to the view that the chairman and the board of those companies are actually not looking hard enough.”

She pointed out that there are about 315 women who are directors of ASX 200 companies and, of those, 225 have only one board role.

“There are a lot of women with a whole range of skills that now have experience of being on a listed board,” she explained.

Upskilling for the future

While there are many capable women to help meet the 30% targets, there is no doubt a pipeline of women with board experience is needed.

The 30% Club works with top investment banks and private equity firms to build networking opportunities for women who want to get onto boards.

Additionally, Ms Wakefield Evans pointed out the Australian Institute of Company Directors has mentoring programs where board-ready women are paired with ASX chairs for 12 to 18 months.

“We’ve achieved what we have with the support of an enormous amount of people. It has not been a small group and it has been men and women as well.”

Changing culture

As part of its campaign, the 30% Club has established an investment banking/private equity working group to generate greater support from business and the investment community in building gender diverse boards.

Head of the investor working group Susan Roberts said large super funds and fund managers were leading the way in advocating for gender diversity – sustained by the notion that well-governed, sustainable and diverse boards will deliver more positive results over the longer term.

Advocates for greater female board representation including Ms Wakefield Evans say Australia’s top organisations need to reflect what our society actually is: 50% men and 50% women.

“The community, at large, expects the composition of boards to reflect the broader Australian population,” Ms Wakefield Evans said.

When looking at company culture, it is known that the more women an organisation has in senior leadership and executive roles, the better gender diversity there is right through the organisation.

As an example that change is possible, Ms Wakefield Evans, who is also a non-executive director on LendLease Group’s (ASX: LLC) board, said the property industry realised it had a gender issue about five or six years ago.

The industry set up the Property Male Champions of Change and began to look inwards to understand why their organisations did not have a large number of women.

Companies that were a member of this group implemented different policies to support more women coming into their organisation.

“The companies have also looked at their employment and recruitment practices to understand where they were artificially creating barriers to women,” Ms Wakefield Evans said.

She said construction companies had paired with universities to get encourage more women to study civil engineering and noted there was also a push to get more women in construction trades such as plumbing and electrics.

“Although a lot of work is still needed to unpick the issue, the companies are much better tooled and understand what the issues are today than they did five years ago.”

More change needed

The latest Financy Women’s Index was delivered today and is a reminder that economic equality for women is unlikely until at least 2031, despite the current progression.

The index measures economic progress of Australian women on a quarterly basis and the first quarter of 2019 revealed little improvement in female representation on ASX 200 boards.

Financy Women’s Index founder Bianca Hartge-Hazelman said in a time of rising employment, there are many women who are still underpaid, and underemployment is actually worse than a decade ago.

“Employers and policy makers need to do more to support women in addressing the many challenges that continue to hold back financial progress,” Ms Hartge-Hazelman explained.

Investor relations service provider The Capital Network co-founder and executive director Julia Maguire agreed, saying there is “much more work to be done”, but we were on the right path and committed to progress.

The Capital Network’s other co-founder and executive director Lelde Smits told Small Caps the Australian share market has around 1,700 companies with a market value of $400 million of less.

“And, from those, less than 30 have equal representation on the board.”

“International Women’s Day presents an opportunity to highlight the facts and focus on creating a fairer future for all,” she added.

Goals kicked

Despite ongoing work needed to entrench true gender diversity across corporate Australia, Ms Wakefield Evans noted that Australia’s ASX 100 and ASX 50 companies were among the first in the world to lock-in 30% female board representation.

Female representation ASX company boards 2018
Female representation at a board level across ASX-listed companies.

“The ASX 50 are now at 31.6% and the ASX 100 are at 31.5% – they’ve actually gone through the 30% and reached those targets mid-way through last year.”

She said these goals have also had a trickle-down effect with subsidiaries of large global organisations and private Australian companies also appointing more women to their boards.

“I believe the time is right to look beyond ASX 200 companies to also include the small cap sector,” Ms Wakefield Evans said.

Lorna has more than 10 years' experience as a finance journalist and editor. She has written for numerous industry publications reporting on various sectors, including: resources, energy, construction, biotech, pharma, science and technology, agriculture, and chemicals. Specialising in resources, Lorna has also covered a myriad of small and large cap ASX and dual-listed stocks.