14 June 2024
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Demands escalate for boards to be more Aussie

Peter Switzer
11 June 2024

The attack on the ‘old boys club’ that is the boardroom of our listed companies is set to go to a new inclusive-conscious level, with some advocates wanting the sexuality, age, Indigenous heritage and disabilities of directors to be revealed.

But wait there’s more, with calls for diversity targets to be set in concrete so boards better reflect the varied customer bases of companies. And this comes as similar demands are being made for companies in the US and UK.

In recent years there have been moves to reduce the number of Anglo-Celtics men on boards for more women and for directors from more diverse backgrounds. However, the progress doesn’t look impressive. “It’s about time for targets. Ten years of doing nothing has not moved the dial,” said chairman of baby formula manufacturer Bubs and a director of broadcaster SBS, Katrina Rathie, to the AFR’s Sally Patten.

Rathie thinks there should be ethnic targets on boards.

Patten put the issue into context with the following: “The proportion of directors from non-Anglo-Celtic backgrounds fell to 8.8 per cent from 9.5 per cent between 2017 and 2024, the Governance Institute of Australia’s latest board diversity index shows.

“At the same time, the proportion of Australia’s population born overseas increased to 30.7 per cent in 2023 from 29.5 per cent the year before, and the 2021 census found that almost half of Australians had a parent born overseas.”

This says our boards are no longer Aussie enough!

This isn’t a new age issue that will go away. There’s an argument that boards are filled with recruits from the so-called ‘old boys club’ and at the same time, judging from the share price action of many companies, boards do need new people leading these businesses.

In a perfect world, we’d simply get the best people because shareholders (who are the owners) deserve that, as they have their money invested in these companies.

However, given the prevailing process of who gets offered board positions, it’s certain that in the future we’ll see companies being forced to have a measurable objective and time frame for achieving cultural, ethnic and racial diversity on their boards.

On one hand, some would argue this for fairness. The stronger argument should be if a non-Anglo woman has the qualifications and experience to be on a company’s board, then she should be given a shot.

Clearly, because the success of a company is shown in its profit and share price, and much of our super is tied up in public companies, the demands for more diverse boards shouldn’t be seen as a social get-even movement.

The new people selected from diverse backgrounds need to be great potential directors and if companies are forced to look wider for better candidates to sit on the board, then that makes perfect economic sense.

And while there’s merit in companies revealing the backgrounds of their directors, some of these people might have privacy concerns about going too public with their diversity.

Also, over the weekend, EU elections saw a surge in voting for far right candidates, largely at the expense of Green candidates. Socially, there’s a growing concern that well-meaning minority pressure groups are becoming too powerful and are insisting on changes that have merit that wider populations aren’t comfortable accepting.

Our election next year could be an interesting test with Opposition leader, Peter Dutton and the Coalition making up more ground on Labor in recent popularity polls.

As The Conversation.com reported: “A national Newspoll, conducted June 3–7 from a sample of 1,232, had Labor and the Coalition tied at 50–50, a two-point gain for the Coalition since the post-budget Newspoll, three weeks ago. This is Labor’s worst position in Newspoll since last November, following the fallout from the defeat of the Voice referendum.”

Meanwhile, in the Albanese versus Dutton battle of our preferred PM, the previous score was 52 to Albo and 33 to Pete. It’s now 46 plays 38! When Peter Dutton becomes more popular, you have to suspect the Australian voter could be changing.

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