Report shows 60% increase of women in boardrooms, but changes to cultural diversity remain slim

A new report examining 300 organisations and more than 2000 board seats has found a 60% rise of women in boardrooms over five years, but marginal changes have occurred when it comes to cultural diversity.

The Watermark Search International and Governance Institute of Australia today released the Board Diversity Index, which gathered five types of diversity focusing on gender, cultural background, skills, age, tenure and independence. 

Since 2016, the number of ASX 300 companies with one or no female directors has halved and the number of boards with at least 30% women has tripled. 

The latest #BoardDiversity Index has been released today by Watermark Search International and Governance Institute. Putting 5 types of #diversity under the microscope, the Index examines gender, cultural background, skills, age and tenure & independence. https://t.co/s6ecB7wOiy pic.twitter.com/73G6Da53HS

— Governance Institute of Australia (@GovInstAus) August 3, 2021

Boards with no women have lowered from 59 in 2016 to 14 this year to date. 

On the education front, women are equipping themselves with more qualifications before reaching the boardroom, with 8.4% of female board members holding a PhD compared to just 5% of men. 22% of women on boards have an MBA, while just 16.9% of males had MBAs.

Megan Motto, the chief executive of the Governance Institute, said the rate of change on gender diversity uncovered in this latest index is important to note for Australia’s boardrooms. 

“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,” Motto said. 

“These milestones, while well-overdue, will be truly momentous and we urge companies to ensure they keep up the positive action and strategies.”

Motto believes that a greater diversity is not just reflective of broader society, but also better for business. She wants organisations to pay close attention as pressure continues to build. 

“We are seeing investors and other stakeholders increasing pressure on companies to be more reflective of the community within which they operate,” she said. 

“Consumers are increasing the pressure, choosing to spend their dollars with diverse organisations which can demonstrate strong ethics and good culture.”

“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 really need to be on the ball.” 

David Evans, Watermark Search International’s managing partner, believes that despite improvements being made on gender diversity, cultural change in the boardroom is moving much slower, with 90% of directors from a Anglo-Celtic or European background. 

“The report highlights that Australian boardrooms remain dominated by those of Anglo-Celtic and European ethnicity,” Evans said. “Based on current trends, it will take eighteen years for the boardroom to be reflective of Australia’s cultural diversity.”

“The Board Diversity Index offers organisations valuable insights into trends in Australian boardrooms — but it also delivers a roadmap for continued improvement,” he continued. 

“Organisations can use this report to drill down into these key issues and see where further work may be needed.” 

Evans insists that the breadth of the data in the report gives meaningful analysis to where corporate Australia is currently placed on diversity, the direction it is heading, and what needs to be done to improve the statistics.

This article was first published by Women’s Agenda.