Research conducted by BlackRock on gender diversity and policies in Australia’s largest listed companies found 18 per cent of ASX200 companies have no gender diversity on their boards.
BlackRock corporate governance and responsible investment director Pru Bennet said the research also indicated the majority of companies are still applying a “largely minimal standard mindset to the reporting of their diversity obligations”.
She said while there has been some improvement in diversity since BlackRock’s first report three years ago, there is still scope for more.
As part of its analysis BlackRock also reviewed the guidelines of the organisations that advise large institutions including superannuation funds on how they should respond to proposed board resolutions.
Ms Bennet said three of the most commonly used proxy advisors in Australia, including CGI Glass Lewis, ISS Governance and Ownership Matters, stated board diversity remains an issue and are now “strengthening their stand on achieving diversity”.
“For example CGI Glass Lewis has said it will consider recommending voting against the chair of the nomination committee, or the equivalent, at the company’s annual general meeting if a company’s record on diversity is poor,” said Ms Bennet.
Ms Bennet said the Australian Council of Superannuation Investors also refers to diversity in the discussion of core principles of board composition in their guidelines.
“Our conclusion is that gender diversity can have clear positive ramifications for return on investment over the medium- to long-term,” she said.
“However, some investment is required, backed by clearly detailed and implemented policies, to kick start gender diversity’s virtuous circle.”
