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Super funds to raise the bar on boardroom gender balance
Some 26 superannuation funds, including Australian Retirement Trust, Cbus, HESTA, and UniSuper, could soon vote ‘against’ male director re-elections in ASX201–300 companies where women don’t occupy a minimum of 30 per cent of board seats.
The new voting policy by the Australian Council of Superannuation Investors (ACSI), which would take effect from July 2023, was aimed at promoting gender balance in Australia’s listed company boardrooms.
As per the latest Australian Institute of Company Directors (AICD) Gender Diversity Report, women’s representation on boards stood at 36 per cent in the ASX 200 and 35.5 per cent in the ASX 300 at the end of February.
The new policy was likely to affect high-profile listed companies such as Goodman Group, which has three female directors on its 11-person board; Magellan Financial Group, which has one female director on its six-person board; and mining companies like Core Lithium and Sayona Mining, which has no women on the board, according to AICD’s Gender Diversity Report.
“It’s positive to see the significant shift towards greater board diversity in the ASX 300. For investors, this means boards are accessing a larger talent pool which provides more diverse skills and backgrounds to draw on,” said Louise Davidson, ACSI chief executive.
“However, these averages mask a lack of progress in many companies, such as the 97 companies in the ASX 300 which fall below the 30 per cent mark.”
In applying this updated policy, ACSI said it may recommend its members to vote against existing directors of ASX 300 companies with poor gender diversity during the 2023 AGM season, with a focus on those most accountable for board succession and composition.
The voting recommendations would be applied on a case-by-case basis and would be combined with direct company engagement.
Additionally, ACSI and its members also aimed to encourage companies to develop a time frame within which they will achieve gender balance (40:40:20) on their boards.
According to Davidson, this signalled a shift from an aspirational target to a minimum standard.
She said: “There’s a fair way to go — even in the top 200 companies there are still 54 who fall below 30 per cent. Ultimately though, we hope that this policy becomes obsolete in the next five years as Australian companies build and maintain gender-balanced boards.
“The old excuse was that there weren’t enough women with ‘appropriate’ qualifications, but Australian boards have dispelled that argument — so far this year, 45 per cent of board appointments have been women.”
AUTHOR
Rhea Nath
Rhea L Nath is a journalist on Super Review and InvestorDaily, with a focus on funds management, superannuation, and institutional investment. Previously, she covered small business and entrepreneurship news at Dynamic Business and multicultural issues at Indian Link Media Group. In 2022, she was named Young Journalist of the Year at the NSW Premier’s Multicultural Communications Awards.
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Are these super funds going to find out if they're blocking the best director who's driving the financial success, or just block regardless.
Is that a sole purpose test issue?
Do people who don't identify with either gender count towards the 30% who aren't men, or the 70% who aren't women side of the line.
Is the best approach for business to get the best people promoted regardless of gender, race, etc, and the start (which should have already happened) is gender/race/etc have no impact on promotions.