‘Diverse talent shouldn’t be seen as risky’: A snapshot of the 2024 Board Diversity Index
The new national diversity and representation report has been released, celebrating improvements, while highlighting gaps in the makeup of Australia’s corporate boards.
Standing as “the only national report” that analyses diversity and representation for ASX300 boards in Australia, the 2024 Watermark Search International/Governance Institute of Australia Board Diversity Index has revealed that there hasn’t been significant change in boards.
As Watermark Search International’s managing partner, David Evans, writes in the report’s introduction, boards are “still mostly ‘stale, male and pale’.”
Despite Evans’ insistence that leaders ought to embrace diversity and representation during board hiring operations, many of them “still go with someone who they perceive as a ‘least risk hire’ because they’ve been on the board of a similar company.”
“This old mindset is why we are still struggling to shift the needle on board diversity,” writes Evans.
Credit: ‘The 2024 Watermark Search International Board Diversity Index’
However, the report does acknowledge that there has been a noticeable uptake in women directors over the years.
“More women have gained board positions during the decade, driving towards gender equality on ASX300 boards,” the report states.
“By 2020, ASX300 boards had reached their target of 30% women directors overall [in reference to the 30% Club Australia which calls for 30% of women being included on ASX300 boards before 2021’s end], which signalled progress towards a gender ratio of 40:40:20 across all boards by 2030.
“This year 123 boards (41%) have hit the 40:40:20 target.”
The numbers show a steps towards improvement for gender equality on boards. While 35% of board positions were occupied by women last year, this year has seen an increase of 1%, making 36% of positions held by women.
“This year more than two thirds (69%) of ASX300 boards now have 30% or more women; boards with one women has jumped to 45 (from 34 in 2023) and the number of all male boards has dropped to 13, from 15 last year,” the report explains.
In terms of age, directors are an average of 61 years old, placing them on the younger side of the baby boomer age group. While the age has gone up (since 60 was the average in the last seven years), it has also resulted in “fewer directors under 50”.
The averages also show that male directors are a few years older than female directors – 62.3 and 58.7, respectively. According to the Watermark report, “As the average tenure is less than 10 years (82% of directors), within a decade baby boomers will no longer be the dominant generation on boards.”
At the same time, ethnic and cultural diversity continues to struggle to reach the board.
People who are “of Anglo-Celtic and European ethnicity” dominate ASX300 boards, with the number of Anglo-Celt board members having increased to 91.2% (compared to 2017’s 90.5%).
“The percentage of directors living outside Australia currently sits at less than a third (30%) and the proportion of directors located in Asia has dropped in the last eight years from 13.9% in 2016 to just on 10% in 2024,” the report provides.
Outside of Caucasian representation, Watermark’s research examined representation for directors that are of First Nations descent, have a diverse cultural background, and those who identify as LGBTQ+.
For First Nations directors, their numbers haven’t grown “(still 4 in 2024)”, but “an extra board position is now occupied by a First Nations director, bringing the total to 7, up from 6 in 2023.”
“Directors from culturally diverse backgrounds occupy the same number of board seats at 183 (9%) as last year,” the report explains.
In terms of LGBTQ+ identifying directors, Watermark found that only “4 directors openly identify as LGBTQ+ in publicly available reports.”
However, it does acknowledge that investigations by the Australian Association of LGBTQ+ Board and Executive Inclusion (ALBEI) have found that “there are as many as 20 LGBTQ+ directors in 2024, doubling ALBEI’s figures from last year.”
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Matthew is the editorial assistant at Mumbrella. He joined the company at the end of September 2023.
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2024 Board Diversity Index
David Evans
Watermark Search International Board Diversity Index
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