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Rise of women onto boards ‘painfully slow’

The Australian Council of Superannuation Investors (ACSI) chief says the”painfully slow” rise of women onto the boards of Australia’s largest companies is continuing, despite a widespread wish for change.

The ASIC annual survey, Board Composition and Non-Executive Director Pay in ASX200 Companies, released on Friday, explored the make-up and diversity of Australian boards, with a focus on gender, board size, independence, new entrants, tenure and director fees.

ACSI CEO Louise Davidson said despite the proportion of women on boards doubling during the past 10 years, they still stood at just under 23 per cent of directorships in the ASX100.

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“The inexorable, if painfully slow, rise of women on the boards of Australia’s largest companies was continuing,” Ms Davidson said.

“Progress is lagging in the ASX101-200, though, with women only holding just under 14 per cent of board positions.

“Despite this, we believe there is a widespread mood for change, and momentum is growing around the issues of board diversity.”

ASX100 women on boards.

ASX100 women on boards. Source: ACSI

Another key finding in the survey was that more and more bankers were joining boards. Out of the new appointees to the ASX100 boards, 14 of those directors had banking and finance backgrounds.

Ms Davidson said the ACSI maintained that well-governed boards required their directors to hold equity in the company – but another key finding of the research showed nearly 11 per cent of ASX100 non-executive directors had no ‘skin in the game’, owning no shares in the company they preside over.

“This is a poor result and we hope the number begins to improve,” Ms Davidson said.

“While we don’t mandate how many shares an individual director should own, we do believe that having skin in the game aligns directors more closely with the investors they represent, and that well- governed boards require their directors to hold equity in the company.”

She said increasing diversity on boards could also be ushering in generational change.

The study showed that 62 per cent of women on boards were aged 40 to 60, against just 27 per cent of men. In contrast, nearly three-quarters of male non-executive directors were aged 60 and over.

 

Age and tenure.

Age and tenure. Source: ASCI

Meanwhile, the research revealed a trend for directors to sit on multiple company boards – with 105 directors taking up one-third of all ASX100 seats.

This highlighted the challenge of expanding the director gene pool, Ms Davidson said.

The proportion of board seats held by non-executive directors continued to rise with the biggest change in the ASX101-200 sample, which increased from 80.8 per cent in 2013 to 82.2 per cent, compared to a very slight increase in the ASX100 from 84.4 per cent in 2013 to 85 per cent.

The 2014 study contains entities in the S&P/ASX200 Index as at June 30, 2014.

The ASX100 sample included 657 individuals holding 787 board seats.

The ASX101–200 sample included 539 individuals holding 578 board seats.

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