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'What gets measured, gets done': Boards that set and measure gender diversity targets have more women

Nassim Khadem
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It's a pretty simple concept that some of corporate Australia is yet to grasp: companies that set and measure gender diversity targets are more gender diverse.

A research report, released by The 30% Club, analysed ASX 200 companies' annual reports and found that the more comprehensive the reporting, the greater the percentage of female board members. 

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The ASX 200 Director Snapshot, found that all ASX 200 companies with female chairwomen reported gender diversity results. The percentage of females heading ASX 200 boards is 5.5 per cent (as of May 31). But overall, less than 60 per cent of ASX 200 companies published a numerical gender diversity target (58.5 per cent).

This is despite the former Labor government in 2012 introducing legislation that requires non-public sector employers with 100 or more employees to report to the government against various gender equality indicators. These were controversially watered down by former prime minister Tony Abbott.

Need to measure

Meredith Hellicar, former James Hardie chairman and now principal at mentoring firm Merryck & Co, said regardless of whether or not gender-based reporting was mandated, there was now a community expectation that companies would track progress on diversity.

"In the context of health and safety reporting, no one says, 'oh there's no need to track how we're going on safety incidents," Ms Hellicar said. 

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"So the same principle applies [to gender-based reporting]. What gets measured, gets done."

She said groups such as The 30% Club, and Australian Institute of Company Directors (AICD), were monitoring the ASX200's journey towards meeting a voluntary target of 30 per cent female directors on boards by 2018.

Still a man's world

It is still a man's world in corporate Australia – across the ASX 200, most directors on board are male (as of May 31, the percentage of men was 74.6 per cent, and women was 25.4 per cent). 

There are still 13 companies on the ASX 200 that have no female directors, and six have not had a female director in the past two years.

But moving closer to 30 per cent is progress. In 2009, when the AICD data started being collated, women made up only 8.3 per cent of ASX 200 boards.

The 30% Club's report found that the top five sector backgrounds for female board members are: banking, finance and insurance (53.9 per cent), mining, resources and energy (18.8 per cent), IT and telecommunications (16.5 per cent), government and public sector (15.2 per cent) and healthcare and pharmaceutical (14.4 per cent). 

The percentage of females heading ASX 200 boards is 5.5 per cent (as of May 31).

Long tenure a barrier

Ms Hellicar, who is also a member of Chief Executive Women, said a major barrier to having more women sit on and/or head ASX 200 boards was that directorships were long tenures, in some cases up to ten years.

The report found that just over half of all board members (54.3 per cent) have been on the board for under five years.

Common reasons provided for not appointing a woman included that no one is moving off the board or no one is due for re-election. "Chairmen say, 'we would like more women but there's no one due to retire'," Ms Hellicar said.

She said companies needed to think more strategically about board composition and "there should be board movement sooner" to make space for qualified women.

Boards influence C-suite

There are notably more male board members with engineering experience than female board members with engineering experience. But there are more female board members with sales and marketing and consulting experience than male board members. 

While almost two-thirds (64.4 per cent) of all board members have C-Suite (such as CEOs, CFOs and CIOs) experience, the report found that a greater percentage of male (69.9 per cent) than female (48 per cent) board members have C-suite experience.

The results follows another recent report by accounting firm KPMG that found companies with females on their boards have achieved higher revenue growth, profitability and shareholder returns than those without.

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