More board seats for fewer women: Research reveals failings amidst marginal progress for diversity

More board seats for fewer women: Research reveals failings amidst marginal progress for diversity

Photo: Mimi Thian, via Unsplash.

While new research from two indices indicates that ASX 300 companies have the potential to reach gender equality by 2030, there are signs a concentrated “exclusive club” is forming amongst experienced female directors.

The 2022 Board Diversity Index, released today by the Governance Institute of Australia and Watermark Search International, found that while the number of women on boards increased by 34 this year (to a total of 667), 19 per cent of female directors occupy 48 per cent of female seats.

The figure signals a step backward from progress made in 2021 when it was found 29 per cent of female directors held approximately 51 per cent of female-occupied seats.

“The most experienced and prominent female directors are collecting a disproportionate number of board seats, and relegating many newcomers to single-board status,” the report said.

“The pace of change may have slowed to some extent, with previous advances being more dramatic, but there is no stopping the momentum in Australian business.”

Female board members were also found to hold more tertiary qualifications than their male counterparts, with 88 per cent of female directors holding an undergraduate degree, compared to 76 per cent of male directors. 

A female director is also almost doubly likely to hold a PhD than her male counterpart, and is also much more likely to hold a Masters degree or governance qualifications.

The number of companies with female chairs has increased from 30 to 37 this past year, with 13 of those being appointed in 2021. Of the 24 businesses with female chairs, at least 30 per cent also have female board representation.

Of the total 2,053 board seats examined, 32 per cent of roles were filled by women and 90 per cent were found to have come from Anglo-Celtic backgrounds. Despite this lack of diversity, the report authors believe there is however a possibility there will be no ASX 300 boards without a female director by 2026.

“2030 could well be a watershed year,” the report said.

“In that year it is quite possible that there will be an equal number of women and men on ASX 300 boards.”

By 2030, the report authors believe the "prototype director" - who is currently an Anglo-Celtic male aged 60 - is going to be a little older and have a higher likelihood of coming from a different ethnic background - "Not overwhelmingly more likely, but with greater probability than today".

According to Watermark Search International managing partner David Evans, the cultural diversity figures were determined by assessing each individual’s background, where they were educated, spent most of their careers, place of residence and how long they lived and worked in Australia. 

It is a measurement process that is inherently subjective as it does not involve surveys or self-reporting from the board directors themselves with regards to the complicated matter of cultural identity.

Business News Australia sought clarification on this matter. Emblematic of the difficulty in quantifying ethnic diversity, it was confirmed that judgment calls are made, and in at least one instance there was a director of Asian ancestry with a European surname who was classed as 'Anglo Celtic' because they grew up in Canada and had lived in Australia for a long time. 

For Vamos, the findings reflect “an ongoing challenge” in boardrooms which are struggling to create “a fair and even playing field” for “all types of diversity”.

“Diversity is not just a ‘nice to have’ or a simple box-ticking exercise," Vamos said.

“We hope the incoming federal representatives takes heed of the findings from this latest Index and puts diversity action firmly on their agenda."

The 2022 Board Diversity Index also provided lists of companies that were either behind or ahead when it comes to having gender diversity on their board.

Companies with no women on the board:

American Pacific Borates Ltd
Australian United Investment Company Ltd
AVZ Minerals Ltd Capricorn Metals Ltd
Centuria Office REIT
Cettire Ltd Core Lithium Ltd
Diversified United Investment Ltd
ISignThis Ltd
Jervois Global Ltd
L1Long Short Fund Ltd
Maas Group Holdings Ltd
National Storage REIT
Objective Corporation Ltd
Sayona Mining Ltd
Silver Lake Resources

Companies with a 50/50 gender split on the board:

Appen Limited
Altium Limited
Australian Ethical Investment Ltd
Bank of Queensland
Centuria Industrial REIT
Charter Hall Long Wale REIT
Clinuvel Pharmaceuticals Ltd
Contact Energy Ltd
CSR Limited
Elders Limited
Jumbo Interactive
Lynas Rare Earths Ltd
Macquarie Group Limited
Pendal Group Limited
Sims Ltd
The a2 Milk Company
Treasury Wine Estate
Tyro Payments
ZIP Co Limited

Companies with more than 50 per cent of women on the board:

Auckland International Airport Ltd
Bapcor Limited
Bendigo and Adelaide Bank Ltd
Blackmores Limited
Deterra Royalties
Dicker Data Ltd
G8 Education Limited
Pushpay Holdings Ltd
Skycity Entertainment Group Ltd
Unibail-Rodamco-Westfield
Ventia Services Group Ltd
Vulcan Energy Resources Ltd
Woolworths Group Limited

Financy Women's Index 

The findings coincide with a quarterly update from the Financy Women’s Index (FWX) released in March, which found that 127 ASX 300 boards failed to meet the 30 per cent threshold of female directors.

The FWX report provides a snapshot of gender equality across seven areas, covering education, employment, underemployment, wages, unpaid work, ASX board gender diversity and wealth (superannuation).

Compared to December, the FWX headline result fell 1.6 per cent to 72.2 points (out of 100) during March and marks the weakest start to a calendar year in a decade.

The score was primarily weighed down by an increased gender gap in the underemployment rate. While male underemployment fell to 5.05 per cent – a decrease of 10 percentage points – their female counterparts only saw a decline of two percentage points (to 8.03 per cent).

The worst performing area of progress – unpaid work – is making a slow but positive shift as men under the age of 35 are increasingly doing more to share the load in domestic duties.

“Women in the same age group have been gradually doing less unpaid work,” the report states.

“Meanwhile women over 45-54 years, whilst gradually doing less unpaid work, are met with little to no improvement among men in the same age group.”

Two areas seeing considerable improvement are superannuation and employment. The FWX Superannuation sub-index found the gender gap in median lifetime balances fell to 25 per cent compared to 31 per cent in December. According to the latest data from the Australian Bureau of Statistics (ABS), the median lifetime balance for women was $50,000 compared to $67,000 for men.

The FWX employment sub-index also improved for the quarter as men encountered a fall of 1.7 per cent in monthly hours worked compared to women (0.1 per cent).

“This report highlights the improvements in the gender gap in superannuation balances at a critical time in our gender equality journey,” FWX author Bianca Hartge-Hazelman said.

“Never before have women been more aware of the need to grow their own super, and this is being supported by organisational efforts as well.

“As a result, we have nearly halved the timeframe to equality in super to 19 years from 31 years.”

However, Barrenjoey Capital chief economist and partner Jo Masters warned it was too early to celebrate.

“19 years to close the gap in superannuation takes us to 2041,” she said.

“It means that we can’t afford to take our eye off the ball, we still need to be proactive with policy initiatives that help to drive this gap down.”

The report also noted the gender gap in superannuation balance “starts to widen around the age of 30” when women “will typically reduce their paid work hours to give birth and primarily care for their first child.”

“This trend has given rise to what is commonly known as the motherhood penalty,” the report states.

“Meanwhile we tend to see more of a fatherhood bonus take shape around the similar time as men are either rewarded by employers or more motivated to increase their position as working dads.”

Based on the worst-performing area (unpaid work) the total time it will take to meet gender equality in Australia stands at 59 years.

Meanwhile, the time it will take to reach gender equality in employment is 28 years, followed by the gender pay gap (22 years), underemployment (15.5 years) and ASX 200 boards (6.5 years).

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