Ever been in the boardroom of a mid-cap listed Australian Company and wondered where all the female directors are?
In our report launched today, the Secrets to Success of the ASX 300+, KPMG Enterprise reveals that only 9 percent of directors in the ASX 300 – 1000 are female. Stark contrast to the ASX 200 where female director numbers have sky rocketed from 8.3 percent in 2009 to over 20 percent today.
The Australian Institute of Company Directors (AICD) is calling for all boards to ensure that 30 percent of their directors are female and are looking for the country’s largest companies to achieve this by the end of 2018. There is recognition this may take longer to achieve for mid-cap and smaller listed entities, and not-for-profit organisations.
The case for gender diversity on boards is clear. There is a well-established link between diversity at the board level and improved financial performance and generation of shareholder value. KPMG’s analysis of the ASX 300+ found that in 2016, those companies with female directors outperformed their rivals in revenue growth, improved profitability and growth in earnings per share.
Cognitive diversity is a competitive advantage – not a quota or statistic to be achieved. Utilising the knowledge and experience of a broad group of individuals leads to better decision making, true understanding of underlying challenges and the ability to take advantage of opportunities. Improvements in financial performance are merely an outcome of diversity of thought.
Some industries in the Australian mid-market have recognised this faster than others – with the consumer discretionary sector leading the way with 14 percent female representation on boards, and telecommunications with 11 percent. Mining companies, utility companies and the energy sector are lagging far behind in the mid-cap space with minimal female representation.
Sixty five percent of mid-cap listed companies have no female directors at all, contrary to the ASX Corporate Governance Guidelines which recommend that all listed entities implement a Diversity Policy and measure against it. The AICD recommendations go a step further with their goal of 30 percent by 2018.
So what can be done to change the status quo? And how do we ensure that a broad talent pipeline is being built for the future?
To start with we need to acknowledge the under representation of women on boards in the mid-cap listed space and make a case for change. It is imperative on the male leaders of these organisations to make the case for change and ‘walk the talk’.
Sponsorship can be game changing. I have experienced this in my own career. Rather than mentoring women and talking to them about how to succeed, sponsorship allows senior male leaders to identify top female talent and talk ‘about’ them and introduce them to the influential individuals in their professional networks. The sponsorship relationship challenges the sponsored person to step outside their comfort zone and make the next career move with confidence.
Sponsorship programs throughout our mid-cap corporate organisations and a commitment to a culture of diversity will help ensure the next generation of female leaders make up half the table in all organisations.
Read the full repot, Secrets to Success of the ASX 300+