Diversity challenge set

The Australian Institute of Company Directors (AICD) is calling for all boards to ensure that 30 per cent of their directors are female and urges S&P/ASX 200 companies to meet this new target by the end of 2018.

This major initiative is another step in AICD’s long-running campaign to improve gender diversity in local boardrooms.

Launching the new target, AICD managing director and chief executive officer, John Brogden, said the new objective is a significant extension of AICD’s previous diversity initiatives and will help companies more quickly reach the critical mass required to produce the optimal business benefits of board diversity.

“There is an undeniable case for gender diversity on boards. It is not only the right thing to do but the smart thing to do, because it means better business performance,” Brogden said.

“Numerous pieces of research demonstrate a positive link between the level of female representation on boards and improved corporate performance.”

Brogden said the 30 per cent target will apply to all company structures, as AICD has a broad membership of over 35,000 that extends well beyond the top listed companies to small ASX entities, private business and not-for-profit organisations.

However, he added that the AICD recognises that the four-year time frame to achieve the target for ASX 200 boards may not be appropriate for smaller listed and non-listed companies, and as a result, a specific date for these organisations to meet the 30 per cent target has not been set.

“Our previous initiatives to increase diversity have contributed to a steady increase in female directors on ASX 200 boards, from 8.3 per cent in 2009 to 19.8 per cent today. We believe more needs to be done to further increase that number, and we are confident our new policy will help achieve that, at a faster pace,” Brogden added.

The AICD will urge all boards to adopt the target and regularly report on their progress towards it so that the results of this initiative can be transparent and monitored by stakeholders.