Transcript Slide 1
Law Institute of Victoria: Diversity Presentation
Eric Mayne
November 2010
Presentation outline
ASX’s Corporate Governance Council new
Recommendations for diversity
Impetus for change
Other initiatives
What else can be done?
Questions
From January 2011, new Corporate Governance
Council Recommendations on diversity will apply
to all listed entities
Boards to develop diversity policy and set gender
objectives
Report annually on achievement against these objectives
Report annually on proportion of women at three levels:
– board
– senior management
– Organisation
Early adoption from 1 July 2010 is encouraged
Guidance commentary
Diversity includes, but is not limited to, gender, age ethnicity and
cultural background
Measurable objectives in Recommendation 3.4 relate to gender diversity
– can include additional measurable objectives
Introduce appropriate procedures to ensure that diversity policy is
properly implemented
Include in Corporate Governance Statement a statement about mix of
skills and diversity which the board of directors is looking to achieve in
its membership
Companies should consider how best to report to achieve an accurate
and not misleading impression of the relative participation of women
and men in the workplace and the roles in which they are employed.
Guidance commentary
Articulate corporate benefits arising from employee and
board diversity
Link achievement of measurable objectives to KPIs for
Board, CEO and senior executives
Include programs and initiatives that would develop skills
and experience that prepare employees for senior
management and board positions
Board nomination committees should consider diversity
in succession planning
Impetus for change
CAMAC report on Diversity on Boards of Directors
Poor record of corporate Australia on gender diversity
Financial studies that suggested diversity could drive
competitiveness
International developments
Impetus for change - poor record of diversity
at the highest levels of corporate Australia
As at 30 June 09, only 8.3% of board members of the Top 200
companies were women*
June 09 Position
All entities
Top 200
Top 500
Companies
Trusts
% companies with
women directors
16%
34%
32%
16%
29%
% women
on boards
3.5%
8.3%
4.9%
3.4%
4.9%
*ASX Compliance Review of June 09 Annual Reports only – excludes companies with December year end
Impetus for change : Research suggests that
there are financial drivers to support change …
“Australia’s hidden resource - the economic case for increasing
female participation” suggests that closing the male / female
employment gap could boost Australian GDP by 11%.
Goldman Sachs JB Were
“The Bottom Line: Corporate Performance and Women’s
Representation on Boards” showed that Fortune 500 companies
with the highest representation of women board directors had
significantly increased financial performance (return on equity,
return on sales, return on invested capital)
Catalyst Research 2007
Impetus for change – International
Developments
UK CG Code- Regard
for gender mix, and
appointment from
broad talent pool
Norway –
40% Quota
Germany – Consider
diversity in management
and board appointments
France – 40% quota by
2016 to pass Senate
Spain – CG Standards
(comply/explain); similar
to Australia
Included in CGC
recommendations
effective from 01/01/11
US Disclosure if
diversity
considered
in
nomination
process
Other initiatives - CGC Recommendations kick
CGC
started the process. What else has been done?
Current board appointment
selection criteria and
processes that do not take
into account the benefits of
diversity.
• More structured and transparent board
appointment process
• Establish Diversity policy
• Set gender objectives
Others
• Report against gender objectives
Relatively small pool of
women with senior
management experience
• Database of suitably qualified women
• Improved targeting of women for
management development
• Executive mentoring
Informal barriers – glass
ceiling
• Raising awareness of the benefits of
diversity and the issues
Other recent initiatives to increase the pipeline of
potential women directors include …
AICD’s ASX 200 Chairmen’s Mentoring Program
BCA C-Suite Project
Chief Executive Women
– CEO Kit to attract and retain women
– Talent Development Program
EOWA Employer of Choice for Women award
program
ASX initiatives
What ASX is doing
ASX is tracking the number of women directors in listed
companies from information provided in Annual Reports to
provide a base line to report against going forward
These figures will be reported in our periodic Analysis of
Corporate Governance Disclosures in Annual Reports
From FY 2011, compliance with ‘If not why not’ disclosure
requirements will also be reported
Companies that materially fail to comply with “if not, why
not” disclosure requirements will be individually written to
by ASX reminding them of their reporting obligations under
LR 4.10.3.
What ASX is doing …
ASX will provide education and resources to support listed
companies in adopting the recommendations:
National road show October/November – details will
be publicised
Generic legal advice on constraints affecting
companies adopting diversity measures
Early Adopter Network meeting - forum of early
adopters
Documentary guidelines
Useful resources
ASX Amendments to the Corporate Governance Principles
and Recommendations 2nd edition, 30 June 2010
AICD New Corporate Governance Recommendations on
Diversity: Tips for getting started
Chartered Secretaries Australia and Women on Boards:
Complying with Principle 3: Strategies for Gender Diversity
EOWA website: www.eowa.gov.au
Change is happening (slowly!) …
AICD figures as at October 2010:
27% of all new Board appointments of ASX 200
entities in 2010 were women (45), compared with 5%
(10) in FY09, and 8% in FY07 and FY08
Women directors of ASX 200 entities as a percentage
increased to 10.1% as at October 2010, up from 8.3%
in FY09.
What else can be done?
Continue to push the debate
Maintain pressure on bodies like ASX, AICD, BCA etc
Much greater focus on senior executive talent pool
Self promotion of women
Networking with chairs and other directors
Talk to existing women directors
Appointments to subsidiary boards
Government advisory roles and NFPs
Combination of all of above.
Thank you.
Questions?