Three years post-launch, HESTA’s 40:40 Vision has revealed in its inaugural progress report, based on a survey of signatory companies, that these entities are outpacing the broader ASX in achieving gender balance and are attributing their success to the benefits of gender diversity.
Launched in October 2020 with support from industry partners representing over $6 trillion in assets under management (AUM), 40:40 Vision seeks to attain gender balance in executive leadership teams (ELTs) across all ASX 300 companies by 2030, embodying a commitment to 40 per cent women, 40 per cent men, and 20 per cent individuals identifying as any gender.
But while the data gathered for this inaugural report emphasises the effectiveness of target setting and spotlights the progress made by many signatory companies, HESTA’s chief executive officer, Debby Blakey, said the rate of improvement remains slow and varies between businesses of different sizes and industries.
Namely, approximately 36 per cent of all ASX 300 companies are yet to set gender composition targets.
“We believe there is an opportunity for corporate Australia to do more; to create more inclusive and flexible corporate cultures, to invest in diverse pipelines that fully leverage Australia’s talent pool, to make leaders financially accountable for progress, and ultimately, to better harness the performance benefits of diversity for investors. Setting targets is a step toward achieving change,” Ms Blakey said.
On the flipside, the report indicated that 51 per cent of signatory companies have already achieved gender balance in their ELTs compared to just 23 per cent of the ASX 300.
“It was also pleasing to see that of the 25 signatory companies who participated in the survey, more than 80 per cent have set interim gender targets for their ELTs, with most already achieving their interim goals,” Ms Blakey said.
Moreover, Ms Blakey shared that investors are elevating expectations for corporate standards, as revealed by the outcomes of a 2023 40:40 Vision investor survey. The survey demonstrates a heightened demand for stronger commitment from companies, with 90 per cent of surveyed investors aligned with 40:40 Vision emphasising gender-related objectives in their engagements with ASX-listed company boards. Additionally, 75 per cent of these investors have exercised their shareholder voting rights to actively promote diversity initiatives.
“As an example of investor action, in 2023, HESTA strengthened its voting policy to include votes against select director elections at ASX 300 companies where the board has less than 30 per cent female representation and against chairs of companies employing single gender executive teams,” the CEO said.
“HESTA took this action because of the extensive research demonstrating how organisations benefit from gender diversity, which for long-term investors, also supports strong beneficiary outcomes.”
HESTA also shared that according to 100 per cent of survey respondents, creating a gender balance in a firm improves talent attraction, retention, and company culture. In fact, more than 90 per cent of respondents said diversity delivered skill sets for future strategic needs, team performance, business results, and company reputation, while also challenging the status quo and fostering innovation while enhancing risk management.
Ms Blakey, however, stressed the need for greater transparency, as 25 per cent of survey respondents still need to include their 40:40 Vision targets in annual or sustainability reports.
Ultimately, she and HESTA called on all ASX 300 companies to set 40:40:20 gender composition targets for their ELTs, increase ambition if existing targets are below 40 per cent of women, allocate resources for diverse talent pipelines, embed accountability for change into leader performance assessments, and seek collaboration opportunities to address shared workforce challenges.
“We encourage companies to seek appropriate collaboration opportunities such as through industry bodies or diversity experts,” Ms Blakey concluded.
