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Australian super funds push for 30% female board members at ASX firms

Company directors could face opposition votes at AGMs

The burgeoning global movement for corporate boards to be at least 30% female has been taken up by pension funds in Australia who want all companies in the benchmark ASX 200 index to reach this goal by 2017.

The Australian Council of Superannuation Investors (ACSI) launched the initiative today (February 5) with the “strong mandate” of its members representing $1.6trn (€1.1bn) in investments and owning 10% of the average ASX 200 company.

It says it will engage with companies on the issue – and in the worst cases, may recommend that its member funds vote against re-elections of directors in those companies.

The ACSI has been campaigning on the issue of board diversity for a number of years. Its activity has helped push the number of new female appointments to 30% of the ASX 200 compared with a meager 5% in 2009.

It is now turning its attention to all board members in ASX 200 boardrooms where 19.3% are female. The issue will be a key priority of ACSI’s engagement with boards in 2015, with a focus on the large number of companies without a single female director.

Currently, almost half of S&P/ASX 200 index companies have one, or fewer, women at board level. Thirty-six companies have no women on their boards.

ACSI CEO Gordon Hagart, said: “ACSI’s motivation to act in this space is the strong evidence of the links between board gender diversity and financial performance.We have been pleased with recent improvements on gender diversity, but these come from a very low base. Our data show that unless we see an accelerated number of women appointed to ASX 200 boards, further progress will be unacceptably slow.”

He added “ACSI hopes that Australian boards will willingly embrace the challenge, avoiding the need for the legislated quotas adopted by many other countries where improvements in diversity seemed to be happening too slowly.”

Fund management executive Helena Morrissey, founder of the 30% Club in the UK, which is campaigning for the same issue on UK boards, welcomed the news.

In the UK, the government has set a voluntary target for FTSE 100 boards to have at least 25% female representation by the end of 2015. This week at an event to encourage FTSE Chairs and aspiring female non-executive to network, Business Secretary Vince Cable said the figure stood at 22.8%.

But Cable warned that while its 25% target remained in sight “the threat of EU mandatory targets remains a reality if we do not meet it”.

He said: “Businesses must not take their foot off the pedal during the final stretch – if we are to avoid action from Brussels we must continue to demonstrate that our voluntary approach is the right one and is working.” Cable also announced the ten most improved FTSE100 boards that included Old Mutual, HSBC and GlaxoSmithKline. Link