2024 Australian Board Diversity Data

The 2024 Board Diversity Index, presenting the survey results of the ASX 300, was recently released. The report published by Watermark and the Governance Institute of Australia highlights significant changes in board diversity trends in Australia. This article overviews their findings and other reports to offer insights into the implications for those seeking a board appointment.

The representation of genders on Australian boards

In 2023, female representation on Australian ASX 300 boards continued to succeed the 30% benchmark, with females holding 36% of the roles. The number of all-male boards has decreased to just 13, and 69% have 30% more women on them. With the female talent pool continuing to expand, the ratio of men to women on boards is predicted to be close to equal by 2030.

The AICD Gender Diversity Report noted similar findings, with 35.6% of ASX 300 board seats being held by women and 67% of ASX 300 boards having more than 30% female representation. Of the 759 board seats held by women, 685 of these are non-executive director roles. Whilst this is good news, more work must be done before we see more women in board chair roles. However, in the past 12 months, the AXS 20 companies have reported an increase from 10 to 25 per cent of women appointed as CEOs.

Some targets regarding Australian government boards have been met, with 51.6% of board positions held by women and 42.3% of Chair and Deputy Chair positions held by women. Updated government data will be available late this year.

The cultural diversity of Australian directors remains unsatisfactory

According to the data, we are still experiencing issues with cultural diversity, with 91% of ASX 300 Directors being Anglo-Celtic. This is not in line with the general population trends, with the growing proportion of Australians of Asian and Indian descent.

There has also been little change in the number of Indigenous ASX 300 directors, with only four directors holding seven seats. Also disappointing is that the % of Directors from culturally diverse backgrounds remains unchanged at 9%.

Director Skills, Experience & Qualifications

This year’s ASX 300 report has seen some backward trends in favouring some directors’ skills, experience and qualifications with a preference for some of the traditional safe skills. After seeing a decline in board directors with experience in Accounting, Banking & Finance, 2024 has increased to numbers not seen since 2016.

The number of directors with experience in the Engineering, Manufacturing, Construction, and Legal sectors continued to decline slowly, while the number of directors with experience in the Mining, Energy, Resources, and Technology sectors continued to rise.

The 2024 statistics include:

• 82% hold an Undergraduate Degree, 20% hold an MBA and 7% a PhD
• 18% hold a Finance Qualification, 37% hold a Governance Qualification
• 40.1% have Accounting/Banking/Finance experience
• 17% have Mining/Energy/Resources experience
• 6.3% have Legal experience
• 7.2% have Technology experience
• 3.9% have Consulting experience

It is worth noting that, even last the ASX level, the majority of Directors have no formal Governance Qualifications. This supports my advice that a Governance Qualification will enhance directorial skills but does not guarantee a board appointment.

The age diversity of directors in Australia

The average age of ASX 300 Directors is 61 years old, with a minimal age difference between the genders. The average age for men is 62.3 and for women is 58.7. These figures have remained relatively stable in recent years and are not expected to change significantly with the population getting older, but let’s see as these aging directors retire from their roles. 

Board tenure

84.4% of board directors and 40.1% of board chairs have tenure of less than ten years. Most board directors are replaced within four years and chairs within 5-9 years. These figures have changed very little over the past couple of years. 

Other notable statistics

Even in our digitally connected world, boards are more comfortable appointing local directors. More than a third of these directors are based in North America, with only 10% from Asia. Considering that Asian countries are by far our largest export markets, one would assume companies would be looking for offshore directors.

Good governance practices resulted in 82.1% of all ASX300 directors being independent in 2024. However, a staggering 95% of all female directors are independent from the organisation they serve. Over time, as we see more females appointed to top executive roles, we would expect this figure to slowly level out.

The phrase “White, male and stale” is becoming less common, but what impact does this have on you?

Securing a board appointment has always been a competitive process, regardless of factors such as gender, age, or professional background. Even if you possess strong qualifications, it is essential to effectively communicate your unique value compared to other candidates who may bring different perspectives or more extensive experience.

While these diversity studies provide helpful information, it is essential to note that they focus solely on ASX300 companies and may not accurately represent the larger NED community. In many organisations, older directors are often seen as out of touch with trends in market competitiveness, regulatory conditions, and ways of working.

These findings suggest that board appointments are shifting, although a little slower with the top ASX companies). The “old guard” of non-executive directors (NEDs) is gradually stepping down, being replaced by younger NEDs who offer different skills, experience, and demographics to support evolving business environments.

This is partially supported by the predictions made in this ASX300 diversity study.

• The representation of technology, marketing, resources and consulting experience is increasing on boards.
• The future focus is technology, branding experience and change management.
• The tenures of current board directors are swaying towards shorter terms.
• The representation of female directors and chairs is expected to continue to grow.

However, we will not truly get past the “White, male, and stale” cliche until boards truly reflect the community they represent. That means having recognised pathways for the disabled, First Nations, and culturally diverse to be appointed to boards.

Resources

The Board Diversity Index

AICD Gender Diversity Report