Composition of company boards has again been in the news especially for the top 200 on the Australian Stock Exchange (ASX200). While the emphasis has rightly been on gender diversity I thought a quick analysis of boards for the ASX200 across a few criteria could be interesting- that is, extending diversity of boards beyond gender. For example there has also been commentary on the lack of “IT” people on boards. Is this valid and should the emphasis be on narrow criteria such as “IT”?
The overwhelming majority of ASX200 listed companies provide detailed information for qualifications and backgrounds for their corresponding boards (around 8% have a higher level of uncertainty due to omissions and three were sufficiently high that they were not included in the quick analysis). Accepting that this is a qualitative view with data open to broad interpretation it still highlights some general trends.
Based on ASX200 publicly available data as of the February 9 2015 approximately:
- Boards on average have 20% female directors
- But 84% of Boards have less than a 1/3rd female membership,
- And no Board has over 50% female membership.
- The number of Boards with a female Chair is 6%.
This lack of diversity is also apparent within professional disciplines. For higher education qualifications:
- 67% of Boards have a Director with a degree in law, or similar,
- Over 90% have a Director with a formal qualification in either Business, Commerce or Accounting,
- 49% with a degree in Arts or Humanities,
- 55% with a degree in Science,
- 47% with a degree in Engineering, and
- 14% with either a degree in an ICT discipline or some significant operational management experience in ICT.
In summary – in terms of professional educational backgrounds Boards are biased towards Directors with either a legal or business/financial qualification, as well as being male.
As Boards are expected to make informed and transparent decisions based on accurate information this lack of diversity across both gender and broader disciplines could blinker Board decision making as well as governance with attention dominated by traditional “organisational mechanics”, such as financial reports.
An analysis of the above data broken down by the ASX industry categories is also interesting as shown in the following charts:
