Submission to the ASX Corporate Governance Council on ASX Corporate Governance Principles and Recommendations

October 2009

Download the full submission (pdf)

NOTE: The ASX Corporate Governance Council announced its recommendations to change the ASX Corporate Governance Principles and Guidelines on 7 December 2009.

Summary

The case to amend Principle 2 of the ASX Corporate Governance Guidelines to assist ASX boards take a wider view of their director recruitment obligations in relation to gender diversity, is compelling.

The Equal Opportunity for Women in Australia’s 2008 census of women’s leadership revealed women hold only 8.3 per cent of board directorships in ASX200 companies and 10.7 per cent of executive manager positions.

Yet women make up over 51 per cent of Australia’s population and 63 per cent of all university graduates. The Global Gender Gap report released by the World Economic Forum in 2008 shows Australia sits in the group of countries that are number one on women’s educational attainment but is number 41 when it comes to women’s workforce participation (38%).

There is no nation, government, industry or sector that can sustain such a significant loss of a highly educated, experienced and professional workforce over the long term. If Australia continues its trend of under-valuing and under-utilising its female talent it will struggle to remain internationally competitive and innovative in its business practices.

Moreover it will continue to fall further behind other OEDC nations who have seen the business case for improving diversity in their leadership ranks. Australia already lags the USA, Canada, the United Kingdom, New Zealand, most European Countries and South Africa in the percentage of female directors in the top 500 companies.

Women on Boards views ASX companies as a high priority as they are the benchmark for economic activity in Australia, yet are the worst performing sector in relation to women in leadership positions. By contrast the numbers of women in leadership roles in academia and the public sector have shown steady increases as outlined below.

Female participation on boards by sector

• ASX200 companies - 8.3% (EOWA 2008)
• Top 200 NFPs (by revenue) - 28 % (WOB 2008)
• Credit Unions - 19 % (WOB 2007)
• Health funds - 22 % (WOB 2007)
• University Vice Chancellors - 21 % (EOWA 2008)
• Federal Ministry - 21.4 % (EOWA 2008)
• Government boards/ committees - 35 %  (FAHCSIA 2008)

The participation of women in leadership roles in the ASX will reduce further unless serious, positive and urgent action is taken. There is also growing evidence that the traditional conservative attitudes of women towards gender targets and quotas are changing as they become increasingly frustrated at the lack of diversity at board level. This is discussed further on in the report.