The Australian Institute of Company Directors today launched ‘Tomorrow’s boards: Creating balanced and effective boards’, a new book investigating the current composition of Australia’s boards and their selection practices, and the limitations of mandatory quotas and their failure to achieve cultural change.
Tomorrow’s Boards is the first Australian book to bring together key research on the positive correlation between gender diversity on boards and in management, and improved corporate and financial performance. It also offers practical guidance on the process for selecting the best directors and the importance of considering diversity as part of the selection process.
Author of Tomorrow’s Boards, Anthea McIntyre, says international experience has shown that quotas on boards can have unintended consequences and are unlikely to result in any cultural change within companies, or any improvement in the number of women in executive positions.
“Currently, women make-up more than a half of Australia’s university graduates and nearly half of the total labour force. Yet, only 4 per cent of line managers, 8 per cent of senior executives and 12.7 per cent of directors in Australia’s top 200 companies are women; while 70 ASX 200 companies still do not have any women on their boards.
“But the rush for greater diversity through a ‘one-size-fits-all’ approach to improving the representation of women on boards, that has been trialled in other countries, ignores the pipeline problem by failing to ensure there is a sufficient number of suitably qualified and experienced women directors to fill the quotas,” said Mrs McIntyre.
“Seeking diversity at all costs and imposing quotas could lead to women being appointed to boards who do not have the requisite experience, skills or knowledge thereby having a negative impact for companies and their stakeholders.
“Quotas also undermine women’s professionalism and credibility by implying that their selection is not based solely on merit. Boards should instead adopt a range of measures for achieving greater diversity, which are tailored to the needs of the company.”
CEO and Managing Director of the Australian Institute of Company Directors, John Colvin says the progress made in Australia so far is evidence that board rooms can make the shift without quotas.
“You only need to look at the results of practical programs we have implemented, such as our Chairmen’s Mentoring Program, to see that business can resolve this issue without government intervention,” said Mr Colvin.
“Since we launched our Program last year, women have comprised on average 27% of all new appointments to ASX200 boards, compared to only 5% in 2009, and 8% in 2007 and 2008. While we still have a long way to go, Australia now ranks ahead of many of our international peers in gender composition of top listed company boards, including the United Kingdom, Canada and New Zealand.”
For further details please contact: Ian Zakon, Media and Government Relations Advisor, (02) 8248 2786, [email protected]
The Australian Institute of Company Directors provides education, information on corporate governance for directors and boards Australia wide, with offices in each state to cater for 28,700 members. Our members work in diverse corporations such as small-to-medium enterprises, the ASX200 corporations and public sector organisations.
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