Pru Bennett

As part of its analysis of gender diversity and policies in Australia’s largest listed companies, BlackRock has also reviewed the guidelines of the organisations that advise large institutions including superannuation funds on how they should respond to proposed board resolutions.

BlackRock’s research has found three of the most widely-used proxy advisors in Australia – CGI Glass Lewis, ISS Governance and Ownership Matters – have now disclosed that diversity is an issue and would consider changing their recommendations to achieve diversity.

In all, 18% of ASX200 companies have no gender diversity on their boards – 38% of companies without any gender diversity on their boards are from the resources industry.

Pru Bennett, BlackRock’s Corporate Governance and Responsible Investment Director – Head of Asia Pacific, said: “Proxy advisors give recommendations to a broad array of institutions, including those representing superannuation funds.

“These proxy advisors 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 AGM if a company’s record on diversity is poor.

“The Australian Council of Superannuation Investors (ACSI) 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. However, some investment is required, backed by clearly detailed and implemented policies, to kick start gender diversity’s virtuous circle.

“Unfortunately, our research says policies and reporting surrounding gender diversity among ASX 200 companies remain piecemeal.

“The majority of companies are also still applying a largely minimal standard mindset to the reporting of their diversity obligations.

“In the three years since our first report on diversity in Australia’s 200 largest listed companies, there has been some improvement but there is scope for more.”

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Pru Bennett

78% of ASX200 companies’ gender diversity reporting is perfunctory or worse, according toBlackRock.

BlackRock’s review of the 2013 annual reports of companies included in the Standard & Poor’s/ ASX200 stockmarket index has ranked 3% of disclosures surrounding gender diversity as ‘excellent’, 19% as ‘good’ and the others perfunctory, poor or generally non-disclosing.

This investigation is the third BlackRock has undertaken into the gender diversity policies and disclosures of Australia’s top 200 listed companies. It is based on information revealed in response to gender diversity disclosure and policy principles required by the Australian Securities Exchange (ASX) in its Corporate Governance Principles.

Pru Bennett, BlackRock’s Corporate Governance and Responsible Investment Director – Head of Asia Pacific, said: “Companies such as Mirvac Group should be applauded for their continued commitment to disclosure.

“However, the majority of companies are still applying a largely minimal standard mindset to the reporting of their diversity obligations.

“In the three years since our first report on diversity in Australia’s 200 largest listed companies, there has been some improvement but there is scope for more.

“To simply state a company has a diversity policy, list some objectives and disclose some statistics does not equate to good disclosure.

“We believe gender diversity can have positive ramifications for return on investment over the medium- to long-term.

“However, our findings show – despite the recommendations of the ASX on gender diversity – the current commitment to gender diversity is piecemeal and they could definitely do better.

“It appears from the board down, gender diversity is not included in the DNA of most companies.”

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