The Australian Council of Superannuation Investors (ACSI) is marking International Women’s Day 2019 by launching an updated gender diversity policy, aimed at increasing the appointment of women to corporate boards.
In 2015, ACSI and our members adopted a gender diversity target – for women to occupy 30 per cent of board positions in listed Australian companies. In 2017, we implemented a policy of recommending a vote at company annual general meetings (AGMs) against the election of directors in companies with poor gender diversity.
ACSI CEO Louise Davidson said, “We have applied our gender diversity voting policy with great effect to reduce the number of zero women boards in the ASX200, until only a handful of recalcitrants remain.
“Now, for the first time, we will extend our policy to ASX200 boards with one woman director and to ASX201–300 boards. ACSI members have endorsed the new policy and are committed to supporting its implementation by exercising their votes at companies’ AGMs.”
Long-term investors regard board gender diversity as a significant business issue. Skilled and suitably diverse boards make for better-governed companies and support long-term value creation.
“The number of ‘zero women’ companies in the ASX201–300 is about one in four, which is unacceptable. In our experience, most of these companies want to ‘graduate’ to the ASX200. In order to grow successfully and sustainably it is important that they consider the deepest possible talent pool of directors.”
Until now, the policy has mainly been applied to companies with no women on their boards. Explaining ACSI’s decision to extend the policy to companies with one woman director, Davidson said:
“Having one woman director does not represent job done. These companies will continue to attract investor scrutiny until a reasonable gender balance is achieved”, Davidson said.
Typically, only one third of board members seek re-election at a company’s annual general meeting. Our recommendations will focus on the directors most accountable for board succession and composition, for example, the Chair or members of the Nominations Committee. New entrants to the ASX300 will be given a one year grace period before we apply our policy.
As always, our voting recommendations will be combined with direct company engagement. We are writing to all ASX300 boards with poor gender diversity to request a meeting. We want to give these companies an opportunity to outline their plans to improve board gender diversity, before we decide how to recommend on their next round of director elections.
To any company hoping for an exemption from the tougher policy, Davidson is blunt, “The case for improving board gender diversity is well established. Companies without any women directors are not just out of touch with community and investor expectations, they’re out of step with their peers.”
“We do not accept that companies can’t find appropriately skilled, experienced and capable women for directorships. The time for excuses is over, we want action.”