The latest snapshot of Australia’s boardroom diversity has found some small improvements but also a broad and continuing stall in cultural and ethnic representation in business decision-making.
Of the more positive findings in the 2023 Board Diversity Index, there seems to be a growing First Nations representation on boards.
The report, from Watermark Search International and the Governance Institute of Australia, found Indigenous board representation in the top 300 ASX listed companies increased slightly from two to four directors holding six seats over the past year.
Other key findings include a slight increase of women on boards since 2022, from 32 per cent to 35 per cent, and a 15 per cent increase of women on smaller company boards from the same year.
Currently, there are no female directors on 15 of the ASX Top 300 boards, and only 10 per cent of directors are from non-Anglo-Celtic backgrounds. The average age of board directors and length of tenure has remained steady as well.
Governance Institute Chair Pauline Vamos said boards should consider all facets of diversity in who is represented to avoid ‘groupthink’ and deliver better decision-making processes for stakeholders.
“In the year where Australians will participate in a referendum on an Aboriginal and Torres Strait Islander Voice to Parliament, it is perhaps timely for companies to consider how they can boost Indigenous voices in the boardroom,” said Vamos.
Adding to the need for improving First Nations representation, Governance Institute Fellow and Chair of the Aurora Education Foundation Charles Prouse says companies need to create new recruiting pathways to find First Nations board members, noting that hundreds of First Nations people can be found on board areas centred around education, health, economic opportunity and justice.
Echoing this sentiment to have companies broaden their search to create diversity, David Evans, Managing Partner of Watermark Search International said they “regularly challenge chairs and boards to look beyond the initial tight criteria of just ‘experience on a similar board’ and really focus on what other people might add to the board’s conversation”.
Another barrier to diversity for companies to be aware of is that minority groups might not feel safe to self-disclose, according to Mark Baxter, co-founder of the Australian Association of LGBTQ+ Board and Executive Inclusion (ALBEI).
Butler said that “ALBEI estimates between 10-15 people who identify as LGBTQ+ are currently on ASX200 boards, though we don’t have enough data to work with yet.”
“Some of our members, particularly men, are reluctant to disclose, fearing career repercussions due to the sense that ‘traditionally masculine leadership’ is more desirable.”
Baxter also notes that Australia is behind other similar nations like the UK or the US in collecting and reporting specific data. He says there are growing calls for more people with disabilities and people from lower socio-economic backgrounds to help guide corporate boards on how to improve interactions with customers.
Adding to this lack of data collection, the Watermark Search International/Governance Institute of Australia Board Diversity Index is the only comprehensive analysis of Australian boards that measures diversity across Australia’s top 300 ASX listed companies in five key areas: gender, cultural background, age, skills/experience, tenure and independence.
“The lack of data does not mean a problem with representation for these groups does not exist. It probably means the problem has not been actively considered,” Baxter said.