Still 'too male, too pale and too stale': Report finds ASX 300 boards are still lagging on diversity

5 minute read  02.05.2023 Kate Hilder, Siobhan Doherty

Governance Institute, Watermark Search International report: 2023 Board Diversity Index


Key takeouts


  • Cultural/ethnic diversity: A standout finding is the lack of progress on this issue – the report found that 90% of board members are from an Anglo-Celtic background (consistent with the 2021 and 2022 reports). As such, the report flags this as an area in need of particular focus.
  • Gender Diversity: The report predicts that based on current trends, ASX 300 boards are on track to reach gender parity by 2030. However, the report also flags that the previous prediction that there could be no all-male boards by 2026 is now in doubt and that concentration remains an issue with just 19% of current female directors holding 48% of all female-held board seats.
  • DEI conversation is broadening beyond culture/ethnicity, age, gender, skills, independence: The report flags that calls are getting louder for the focus on diverse leadership to expand to include 'traditionally marginalised groups' eg people with disabilities, members of the LGBTQ+ community and those from more diverse socio-economic backgrounds.
  • Groundswell of change': Despite the lack of progress in some areas, the report opines that: 

'While there is still a way to go to achieve “optimal” diversity, as our detailed analysis shows, there is an undeniable, substantial and probably irreversible groundswell of change towards better representation of all Australians on boards'.

Report overview

The Governance Institute, in partnership with Watermark Search International, have released their latest board diversity index. The report looks at the progress that has been made toward improving five aspects of diversity on ASX 300 boards - 1) gender diversity; 2) cultural diversity; 3) skills diversity; 4) age diversity; and 5) tenure/independence - over the 2015-2021 period.

The data on which the report is based is current to 1 January 2023.

The report finds that, consistent with the 2022 report, though ASX 300 boards are on track to reach gender parity by 2030 (based on current trends), progress on other aspects of diversity notably cultural/ethnic diversity continues to lag.  Our key takeaways from the report are below.

Lack of DEI now accepted as 'a serious economic and reputational risk'

The report proceeds on the basis that more diverse boards in the broad sense – boards that are ethnically/culturally, gender, skills and age diverse – make better decisions than less diverse boards, chiefly because they bring different viewpoints to the decision making process.    The report states:

'an ethnically diverse board…will have a better understanding of the population it serves, along with a diversity of problem solving and thinking styles, and a better appreciation of the mind-set of key trading partners. In contrast, directors with homogenous characteristics risk blinding boards to emerging expectations in the market about ethical behaviour, sustainability, workplace practices and discrimination'.

The review notes that this view is gaining increasing acceptance in the business community with many businesses now viewing lack of diversity as 'a serious economic and reputational risk'.


Key findings - On track for board gender parity by the end of the decade

Board gender diversity continues to improve

  • The report found that the number of female directors has significantly increased over the past seven years with women now accounting for 35% (in aggregate) of ASX 300 board seats (up from 20% in 2016)
  • The number of women holding Chair positions at ASX 300 companies has also increased from 37 to 40 over the past year, including nine newly appointed in 2022. 

Spike in the number of women on smaller company boards

  • Previous reports have consistently highlighted that larger company boards are more diverse than their smaller counterparts. 
  • This year's report finds that the number of women holding board seats at smaller organisations has surged.  According to the report, women now hold 44% of seats on ASX 201-300 boards (up from 29% in 2021 and just 15% in 2016).  For context, this compares favourably with the level of representation on larger company boards - women hold 36% of ASX 100 board seats and 39% of ASX 50 board seats.

In light of these findings, the report concludes that:

'Momentum towards a gender ratio of 40:40:20 (40% men/40% women/20% of any gender) continues to be strong'.

Further, the report predicts that based on current trends, gender parity on ASX 300 boards could be reached by 2030.

Having said this, the report also points out that there is still room to improve on this (and other diversity fronts).   

For example, according to the report, the 'typical' ASX 300 director is currently male, of Anglo-Celtic/European background, aged between 50-70, resident in Australia, degree qualified and with accounting/finance/banking experience/skills (though as flagged above, based on current trends, the 'typical' director may well be as likely to be male as female by the end of the decade).

Concentration remains an issue with fewer (more experienced) female directors holding more board seats 

Consistent with the previous report, the latest report highlights that 19% of current female directors hold 48% of all female-held board seats, suggesting that boards continue to favour candidates with prior board experience.
However, the report suggests that as women take up more board positions at smaller companies, expanding the director talent pool, the issue is likely to resolve.  The report comments:

'In Australia we have seen a similar reduction in board concentration among male directors, where the concentration factor is now much less pronounced: 12% of male directors hold 27% of board seats occupied by men.  Hopefully the issue of board concentration will be resolved for women soon.  We were aware in the early stages of the rise of more women to board status that some organisations believed there was a shallow pool of potential women candidates for board appointments'.

We may never see zero ASX300 all-male boards? 

The previous two surveys predicted that there could be zero all-male ASX 300 boards by 2026.  This latest report suggests this prediction is:

'now in jeopardy as the number of zero-women boards has stubbornly remained in the vicinity of 15: as some repeat-offender boards fall off the list they are replaced by new boards without women.  So this could mean we’ll never see a zero for this metric'. 

Progress towards increased cultural (ethnic) diversity remains 'static'

The report found that consistent with last year's report, most ASX 300 board members (90%) are from an Anglo-Celtic background which is not reflective of the cultural diversity of Australia's population.  For example, people with Chinese ancestry now make up the fifth largest group in Australia and this is not reflected on boards.

In light of this, the report calls for renewed focus, including 'more rigorous advocacy' on this issue.  The report states:

'Without vigorous, muscular advocacy on behalf of ethnic groups, this situation is unlikely to change in the immediate future.'

Modest uptick in Indigenous representation on boards

On a more positive note, the report also found that there has been an uptick in the representation of Indigenous directors on ASX 300 boards over the past year from two to four directors holding six seats.  The report comments that:

'It’s not a big number, but it shows change is happening.  Still, there is still a long way to go until boards at least match the proportion of Aboriginal and Torres Strait Islander people in the total population, which the census measures as just over 3%'.

On this point, Governance Institute Chair Pauline Vamos suggests that: 

'In the year where Australians will participate in a referendum on an Aboriginal and Torres Strait Islander Voice to Parliament, it is perhaps timely for companies to consider how to boost Indigenous voices in the boardroom.'

Boards are continuing to prioritise accounting/finance skills

The report found that there was little change in the skills/experience represented on boards as compared with previous years or with the qualifications held by directors. 

  • In terms of qualifications, 82% of directors hold an undergraduate level degree and MBAs and/or finance degrees are held by a solid proportion of directors (around a fifth of directors hold an MBA and/or finance degree).
  • The proportion of directors of directors with experience in the mining/energy/resources and technology sectors is trending upward:  14.8% of directors have experience in mining/energy/resources (vs 9.1% in 2016); 4% of directors had technology-related experience in 2016 vs 7.1% in 2022. 
  • The proportion of directors with engineering/manufacturing/construction experience has fallen since 2016 from 20.8% to just 7.3%.
  • Female directors tend to hold more qualifications than their male counterparts.  For example: 10% of female board members hold a PhD (vs 6% of male directors); 21% of female board members hold an MBA (vs 17% of male directors) and 52% of female directors hold a governance qualification (vs 28% of male directors).  Women are also more likely than their male counterparts to have 'soft skills' eg HR/change and consulting than their male counterparts.

Tenure/board independence

The report found no change (on last year) in average length of tenure 80% of directors have served in their role for less than 10 years (consistent with previous reports) and it is 'rare' for directors to serve more than 14 years on the same board (7% of directors fall into this category).

Chair tenure

  • Most Chairs (40.1%) have held their role for between 5-9 years and 29.5% of Chairs have held their role for four years or less.
  • The proportion of Chairs who maintain their position past the 9 year point (the point at which the ASX Corporate Governance Council considers that it is healthy to ask questions about the value of directors) is significantly lower:
    • 18% of Chairs have been in their role for 10-14 years.
    • 4.7% of Chairs have been in their role for between 15-19 years 
    • 7.7% of Chairs have been in their role for 20 or more years.

Age Diversity - little has changed

The report found that the average age of directors has remained fairly constant over time at 60 years overall.
Female directors tend to be younger on average than their male counterparts - the average age for female directors is 58.1 years vs 60.5 for male directors.

Having said this, the report flags there are signals that boards are generally 'trending older'.  For example, the proportion of both women and men on boards under 50 has declined over the past two years.  The report comments that this is out of step with the US where the reverse is true.

Broadening DEI focus 

Despite the increasing levels of acceptance of the value of diversity and inclusion/awareness of the issue, the report highlights that a number of other 'traditionally marginalised groups' - eg people with disabilities, members of the LGBTQ+ community and those from more diverse socio-economic backgrounds - continue to be under-represented in senior leadership roles.

The report observes that there are now growing calls for Australia to follow other countries (eg UK and the US) in looking at ways to improve reporting/transparency around representation of these groups 'to ensure a more varied mix of lived experience in decision making'.

Importantly, the report makes clear that though currently data in Australia is limited, and though there are significant challenges inherent in data collection, increasing diversity on boards beyond the five categories included in the report is worthy of board focus.  The report comments: 

'Boards need to reflect Australian society because their organisations don’t just represent shareholders – they also represent end customers and clients of these companies. v Therefore, it’s not acceptable for boards to be stacked with overwhelmingly white, straight and upper-middle class people while overlooking the many talented diverse people in our community.  There is enough data to show diversity at all levels of leadership improves business performance – and accountability – now we need to see boards become more representative of our diverse society'. 

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https://www.minterellison.com/articles/summary-governance-institute-2023-board-diversity-index