According to the Australian Institute of Company Directors (AICD), the percentage of women on boards in ASX 200 organisations increased from 29.7 per cent in June 2019 to 34.2 per cent in November 2021. Prior, this figure had been largely stable since 2015. While there was a significant increase in female representation from 2010, there were still four boards with no women represented at all in 2019 and, finally, by 2021 there were no all-male boards. Commencing with only 10 women on boards in 2009, the numbers ebbed and flowed.14 When looking at Indigenous inclusion on company boards, the numbers are far lower. But we know that gender and ethnic diversity is good for boards. The AICD encourages a 40:40:20 model in which 40 per cent are female directors, 40 per cent are male directors and 20 per cent are in other categories of diversity. It promotes diverse views and understanding of different contexts, and reduces the possibility of groupthink. While having a homogeneous board might reduce conflict in the initial stages, as the Australian population has become more diverse, so too must company boards diversify to ensure they are representative of the population within their employee and customer base as well as stakeholder interests.
According to Our Community Group:
A number of studies have found that having a diverse Board can also bring about better organisational performance – both financial and non-financial. Diversity makes for better governance – and better governance inevitably means better results. Reaching out to include Indigenous people on Boards will allow services, groups and the wider community to become more welcoming to Australia’s first people.15 Much of the commentary of board members suggests the problem lies in an unconscious bias of people recruiting in their own likeness, leading to boards being ‘male, pale and stale’. However, it is heartening to see more women, for instance, now being appointed, even though the numbers are patchy and equity is not easily or consistently achieved.
Questions
1. Do you think quotas would assist boards to become more diverse in their leadership?
2. What could be done to increase participation by women and Indigenous groups on boards?