Diversity drives corporate performance
- Date:09 Aug 2011
- Type:Media release
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, their selection practices and the advantages inherent in diversity.
Tomorrow’s Boards is the first Australian book to bring together key research on the positive correlation between diversity on boards and in management and improved corporate and financial performance, as well as offering practical guidance on the process for selecting the best directors and the importance of considering diversity as part of the board selection process.
Author of Tomorrow’s Boards, Anthea McIntyre, says that diversity needs to be embraced by Australian boards.
“Companies that take proactive steps now to avail themselves of a broader mix of skills, experiences and backgrounds on their boards and among their executive ranks will have a competitive edge,” said Mrs McIntyre.
Some countries have introduced mandatory quotas for women directors as a way of addressing the lack of gender diversity on boards. However, this ‘one-size-fits-all’ approach ignores the pipeline problem by failing to ensure there are a sufficient number of suitably qualified and experienced women directors to fill the quotas.
“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,” Mrs McIntyre said.
“Boards should instead adopt a range of measures for achieving greater diversity which are tailored to the needs of the company, including setting relevant targets, reviewing board selection practices, critically examining selection and promotion criteria, ensuring the appointment process is rigorous and objective, challenging any unconscious biases, and assisting women in senior positions by shaping an organisational culture that supports the ongoing career development of women in management.”
CEO and Managing Director of the Australian Institute of Company Directors, John Colvin, says that while we still have a long way to go, the Australian director community is already responding.
“Women currently make up 17.6 per cent of directors of ASX 50 companies, 16.1 per cent of ASX 100 and 12.7 per cent of ASX 200. 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,” said Mr Colvin.
“Chairmen and boards consistently tell us that practical programs like our Chairmen’s Mentoring Program have greatly assisted with achieving change in this area. So far this year, women have comprised on average 29 per cent of all new appointments to ASX 200 boards, compared to only
5 per cent in 2009, and 8 per cent in 2007 and 2008.”
For further details please contact: Ian Zakon, Media and Government Relations Advisor, (02) 8248 2786.
Download the media release, Diversity drives corporate performance (PDF 112KB)
Read about the author, Anthea McIntyre, and download the introduction to her publication Tomorrow's Boards (PDF 172KB)
Download current statistics regarding diversity on Australian boards (PDF 271KB)