Susan Roberts
The 30% Club Australia, which is campaigning for 30% women on ASX 200 boards by the end of 2018, is calling for the investment community to engage on the issue of board diversity and to consider diversity when voting on the Report & Accounts and the appointment and re-election of board members.
“This call comes at a time when more and more global and Australian investment managers and asset owners are signing up to the Statement of Intent for Investors,” says Susan Roberts, Chair of the 30% Club Investors Working Group.
The 30% Club Investor Group’s Statement of Intent represents the increasing number of Australian companies that subscribe to and actively promote the goals and philosophies of the 30% Club. These companies publicly endorse and encourage progress on gender diversity.
Roberts notes “It is heartening to see that the investment community and shareholders are increasingly looking closely at the ESG and ethical aspects of how listed companies are running their boards and how they are configured.
“Large super funds and investment managers are becoming increasingly concerned about board diversity and actively engaging with management to accelerate the change in boards.”
Roberts says “Whilst we are strongly supportive of voluntary targets over quotas, we believe that it is important that investors actively oversee companies’ actions. We encourage investors to engage directly with companies in the first instance. However, we believe that, over time, this should extend to AGM voting in the event of inadequate leadership.”
Companies that have already signed the Statement of Intent include Aberdeen Asset Management, AMP Capital, Australian Ethical Investment, Blackrock Investment Management (Australia), CareSuper, Cbus, Colonial First State Global Asset Management, Commonwealth Superannuation Corporation (CSC), First Super, HESTA, Hostplus, IFM Investors, Principal Global Investors (Australia), State Street Global Advisors (SSGA), and VicSuper.
30% Club Chair, Patricia Cross adds “The recent Australian Institute of Company Directors’ Quarterly Gender Diversity report showed that the monthly rate of female appointments to ASX 200 boards declined from 44% in 2016 to just 30% in 2017. This is a very disappointing result.”
Cross says “I think there is conscious bias in terms of how we put our boards together and that becomes very clear from some of the 30% Club research when chairs and board directors talk about fit and style. There is a real aversion to putting people on boards they perceive will not be part of that fit.
“I also believe that the myth of merit is alive and well and more work needs to be done on how diversity matters rather than why diversity matters. There is a lot of research that points to the correlation between female representation in leadership and board and return on equity or performance of companies. Research is done in various ways but the overwhelming conclusion is that diversity matters in producing better results.
“A very healthy and necessary change has occurred over the last 10 years within the Australian superannuation industry whereby the focus is on the long-term return to their members.
“Some fund managers continue to manage money on behalf of the beneficiaries and are focused on the short-term. But what is now happening is that the beneficial owners are saying enough is enough -we want to look at long-term wealth creation, we want companies that are well governed and we want companies that are going to be sustainably put together in a way that they can deliver wealth for us over the long-term. Diversity is a critical component of that,” notes Cross.
