Directors welcome new ASX guidelines on diversity
Mon 07 December 2009
Directors welcome new ASX guidelines on diversity
New corporate governance guidelines aimed at encouraging greater diversity on boards and in senior management, announced today by the Australian Securities Exchange (ASX), were a welcome development, according to the Australian Institute of Company Directors (AICD).
The proposed expansion of the ASX Corporate Governance Council’s Corporate Governance Principles is consistent with aspects of a major initiative announced recently by AICD to encourage greater diversity.
This includes the proposal to require all listed companies, on an “if not, why not?” basis, to adopt and disclose a diversity policy that includes measurable objectives in relation to gender which are set by the board of the listed entity.
“AICD advocates strongly greater diversity on boards and believes companies should adopt an open approach that aims to select the best possible directors from a diverse range of candidates,” said AICD Chief Executive Officer, John Colvin FAICD.
“In regard to gender diversity in particular, AICD believes that the present number of women on major company boards in Australia is not good enough. It needs to be increased.”
“Diversity is a competitive advantage which delivers real value, adding to the collective skills and experience of boards.”
“We think directors should be chosen from a broadly-based candidate pool. Of course, it is crucial that directors have the appropriate individual skills, relevant experience and sound judgement required to contribute effectively to a board but as a group they should also reflect diversity of gender, age, experience, relationships and background,” Mr Colvin said.
AICD welcomed the ASX Corporate Governance Council’s recommendations that listed entities be required, on an “if not, why not?” basis, to disclose in their annual reports progress in achieving these gender diversity objectives, as well as the number of women employed in their organisation, in senior management and on their board.
AICD agreed with the proposed new guidance commentary to encourage nomination committees of listed entities to include in their charters a requirement to continuously review the proportion of women at all levels in the company, highlight the responsibility of nomination committees to address strategies on board gender diversity and diversity in general and require the performance review of the board to include consideration of diversity criteria in addition to skills.
A requirement for boards to disclose what skills and diversity criteria they look for in any new board appointment is also consistent with AICD’s recently announced Diversity Initiative.
The measures announced by AICD (on 24 November 2009) included:
• New recommendations for boards to adopt, and report on, diversity policies and goals for the board and senior management, including measurable objectives for gender diversity;
• Recommendations for greater transparency in board selection processes and reporting;
• A new AICD mentoring program bringing together senior listed company chairmen and emerging women directors;
• A new AICD scholarship program and other educational initiatives;
• Enhanced AICD database and information services for current and aspiring women directors;
• Additional briefings, seminars and other events tailored to the needs of aspiring women directors; and
• A new AICD publication providing guidance for boards and search professionals on board appointments that highlights the advantages of diversity and widening the candidate pool.
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Media Contacts:
Steve Burrell, General Manager Communications and Public Affairs, (02) 8248 6627 or 0407 708 485
Juliet Chandler, Communications Advisor, (02) 8248 6624 or 0412 580 402
Australian Institute of Company Directors (AICD) provides education, information and advocacy for company directors Australia wide, with offices in each state to cater for 25,000 members. AICD members work in diverse corporations such as small-to-medium enterprises, the ASX Top 200 corporations, public sector organisations, not-for-profit companies, large private companies and smaller private family concerns.