Not-for-profit organisations (NGOs) need to step-up on board diversity, as part of calls for listed companies to report on the diversity of their board membership beyond existing gender-based requirements.
Diversity Council Australia (DCA) has contributed to a joint submission calling for the ASX to incorporate objectives for greater cultural and racial diversity in its corporate governance principles. Other appropriate representative organisations have called for LGBTIQA+ and disability representation, which DCA also endorses.
Specifically, the submission recommends that listed companies also disclose the cultural, ethnic, and racial diversity of their board members to ensure accountability and transparency.
Dr Dimitria Groutsis, Associate Professor at the University of Sydney Business School said the continued homogeneity of directors is concerning for a number of reasons.
“Boards represent a powerful and influential voice in the decisions made at the highest levels in corporate Australia, NGOs, and sports boards. Beyond the vast pool of diverse talent that remains undervalued and underutilised, why particular groups are restricted from having a seat at the table is curious.
“It’s time to change this through meaningful measures, reporting and target setting while demystifying the pathway to boards for a diverse group of directors.”
The joint submission voiced support for an objective to achieve gender-balanced boards, rather than at least 30% of each gender, and for listed companies to disclose the effectiveness of their diversity and inclusion practices.
The submission was made as part of consultation on the Fifth Edition of the ASX Corporate Governance Council Principles and Recommendations.
DCA CEO, Lisa Annese, said Australia is lagging on board diversity, with only a small percentage of entities including First Nations peoples, people who are culturally, ethnically, or racially diverse, LGBTQI+ employees and people with disabilities in their diversity reporting.
“Given the current backlash and increasing hostility towards diversity and inclusion practices in Australia and globally, encouraging companies to set and publicly report on diversity targets is critical, she said.