It has been revealed that Australian boardrooms have seen a 60 percent increase in the number of female members in the past five years, though cultural diversity continues to move at a slower pace, according to the Governance Institute.
The new research was compiled by the Governance Institute of Australia and Watermark Search and published on Wednesday 4th August.
As the presence of women continues to increase across Australian boardrooms, it is predicted that there most likely won’t be a single ASX 300 company without a woman on its board by 2026.
The recently published report also noted that the number of boards to have at least a 30 percent female make-up tripled up to 161 in 2021, from 54 in 2016. In comparison, the number of boards without any women at all dropped from 59 in 2016 to a very low 14 in 2021.
Governance Institute CEO Megan Motto believes that the massive increase in the representation of women across Australian boardrooms is a significant change.
“On this current trajectory, there will be no ASX 300 companies without a female director by 2026, and gender parity achieved in the boardroom by 2030. These milestones, while well overdue, will be truly momentous, and we urge companies to ensure they keep up the positive action and strategies,” said Governance Institute CEO Megan Motto.
The figures also illustrated that women are studying harder to secure a seat in the boardroom, with 8.4 percent of female board members having a PhD, compared with 5 percent of men. Women outflanked men with MBAs, too, at 22.1 percent, compared with 16.9 percent of men.
Although corporate Australia is on track to achieving gender parity, it might take 18 years for the boardroom to be reflective of Australian cultural diversity, said Watermark Search International managing partner David Evans.
“The report highlights that Australian boardrooms remain dominated by those of Anglo-Celtic and European ethnicity,” Mr Evans said. “Based on current trends, it will take 18 years for the boardroom to be reflective of Australia’s cultural diversity, aid Watermark Search International managing partner David Evans.
The report discovered that boardroom cultural diversity is moving “in the right direction”, but it is a slow process. It illustrates that Asian representation is growing, but that there remains a substantial opportunity to better reflect the changing complexion of Australia’s population.
“While diversity is not an end in itself, even though some may argue the merits of this point of view, every business, to optimise its success, needs to deeply understand its customers well beyond the demographic metrics conventionally applied to market measurement,” outlined the report.
The report outlines that, although, that those metrics are a starting point for predicting customer needs and appetites.
Watermark Search International managing partner David Evans strongly encourages Australian businesses to heed the report’s analysis and use it as a roadmap to improve.
“The Board Diversity Index offers organisations valuable insights into trends in Australian boardrooms — but it also delivers a roadmap for continued improvement. Organisations can use this report to drill down into these key issues and see where further work may be needed,” the report outlined.
Governance Institute CEO Megan Motto believes that organisations should also consider ensuring greater diversity to mitigate the risk of losing business, as consumer sentiment shifts in favour of it.
“We are seeing investors and other stakeholders increasing pressure on companies to be more reflective of the community within which they operate. Consumers are increasing the pressure, choosing to spend their dollars with diverse organisations which can demonstrate strong ethics and good culture” said Governance Institute CEO Megan Motto.
“Internationally, we are seeing countries list diversity as a reportable benchmark for companies, and firms are starting to link executive remuneration to diversity targets. Momentum is gathering and organisations need to be on the ball” continued Ms. Motto.
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