Key themes and issues regarding board diversity and mandatory gender quota legislation
The increased focus in Australia on improving the representation of women at senior executive and board levels has seen reporting obligations introduced both through the ASX Corporate Governance Council’s Corporate Governance Principles and Recommendations and legislation. The aim is to improve long-term performance and optimise the human capital available to an organisation. It is based on research supporting the economic and business case for increased participation by women in senior roles.
Without greater progress in organisations on adopting gender balance initiatives as measurable objectives, and being accountable to stakeholders on progress toward achieving those measurable objectives, the participation of women in senior roles is viewed as unlikely to increase. Disclosure obligations are intended to address this. Reporting is intended to assist entities to gather information so that they have a clearer understanding of gender balance within their organisations and what objectives they need to put in place to improve gender equality.
Yet concerns have been expressed that reporting to date is inconsistent and speaks to intention more than action. The lack of comparable data also makes it difficult, both internally and externally, to assess progress, including at a macro level. Entities seeking to improve participation and reporting can struggle to find guidance on strategies to increase gender balance at senior levels and enhanced transparency in their disclosures.
While Australia has not introduced quotas to facilitate gender balance, it is frequently noted that without measurable progress that can be reported year-on-year, quotas may be viewed as a necessary next step by the government and regulators. Yet there are strongly held views that the cultural shift that can take place within entities as they set their own targets and work toward achieving them can lead to more optimal outcomes than a compliance-based approach to meeting quotas.