Leading by Example: Insights on Board Diversity From
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LEADING BY EXAMPLE Insights on board diversity from ASX 200 chairs that have 30 per cent women on their boards This booklet has been compiled from he purpose of the interviews was to examine the interviews conducted with ASX 200 Tcommonalities in attitudes, commitment, practices, chairs of boards with at least 30 per values and processes fostered by each of the chairs. cent female directors. Thirty chairs The insights obtained have been grouped under five from the 53 ASX 200 companies with overarching themes: at least 30 per cent female directors 1. The importance of board diversity; (as of August 30, 2016) participated in 2. Board recruitment, selection and appointment face-to-face, phone or written interviews. practices; Some of the chairs were appointed to 3. Boardroom dynamics; boards that had already reached that 4. Organisational impact and the relationship between the board and the executive team; target, but the majority were actively 5. Environmental facilitators. involved in appointing female directors or maintaining the representation of female Chair leadership is necessary to ensure boardrooms and directors due to the retirement of others. organisations adopt open and inclusive environments that cultivate and value diversity. Without chair commitment Many were also non-executive directors and active leadership, progress on diversity can be very on these boards when female directors difficult to achieve, even if fellow board directors are were appointed and thus involved in the passionate and active in supporting the appointment of selection and recruitment process. female directors. 2 THE IMPORTANCE OF BOARD DIVERSITY A belief in the benefits of board Diversity is the insurance policy There is general acknowledgment diversity, in terms of gender and against group-think. It is how we that the mere existence of a diverse other forms, is cited by all the chairs ensure we make the best decisions to board doesn’t automatically lead as the starting point for any effective take the organisation forward in an to improved board performance processes and practices to improve the increasingly uncertain environment. without the fostering of respect for representation of women on boards. Catherine Brenner, AMP diverse views and the encouragement Without true commitment to and of robust debate by chairs. It is belief in the benefits of diversity from I couldn’t think of anything worse the responsibility of the chair to chairs and other directors on boards, than managing a mono-board. ensure that every director actively diversity becomes a tick-a-box exercise Homogenous boards are very prone contributes to the work of the board, and the search process for new female to make inadequately considered both individually and collectively, in directors perfunctory. decisions and to miss opportunities a team environment to produce well The reasons given by chairs for that a more diverse group may identify. thought-out, thoroughly-debated and supporting board diversity focus on Harvey Collins, Navitas soundly-based decisions. Dissent is the performance benefits derived encouraged, but division is not. from having access to a variety of Sameness is the most dangerous Securing diversity of skills, ways of unique perspectives, expertise and thing around a board table. I’m happy approaching issues, and experiences knowledge of 50 per cent of the that we have reached the 30 per around the board table is the starting talent base. Fairness and equity are cent target as I feel we are much point for all discussions around future also considerations but the improved better for it. I’m not just increasing director appointments and succession decision-making capacity of diversified the number of women on the board planning. Seeking to increase the groups and their ability to discuss because it is there as a goal, I actually number of female directors on issues from various angles are the think it is virtuous, correct and, indeed, a board is seen as an important, primary reasons detailed by the chairs. very good business. overlaid means of securing diverse Homogeneity and uniformity will David Gonski AC, ANZ & Coca-Cola skills, approaches and experiences ultimately contribute to the demise or Amatil when seeking out and assessing limit the success of a business. prospective board candidates. DIVERSITY IS THE INSURANCE POLICY AGAINST GROUP-THINK. IT IS HOW WE ENSURE WE MAKE THE BEST DECISIONS TO TAKE THE ORGANISATION FORWARD. “CATHERINE BRENNER, AMP 30percentclub.org3 APRIL I’M NOT JUST INCREASING 2015 35 THE NUMBER OF WOMEN APRIL ON THE BOARD BECAUSE IT IS 2016 52 “THERE AS A GOAL, I ACTUALLY THINK IT IS VIRTUOUS, CORRECT JUNE AND INDEED, VERY GOOD 2015 33 BUSINESS. JUNE DAVID GONSKI AC, ANZ & 2016 51 COCA-COLA AMATIL SEPTEMBER 2015 35 SEPTEMBER 2016 56 DECEMBER 2015 41 DECEMBER 2016 67 2017 SO FAR 66 ASX 200 COMPANIES WITH 30 PER CENT FEMALE DIRECTORS 4 There is no doubt in my mind that the board, each chair expressed rather than what you aspire to? I’m diversity, whether it be at the board, uncertainty as to what the ‘right’ convinced that 30 per cent is possibly leadership, management or employee gender blend should be. They do the tipping point. We shall see. That is levels, delivers more effective problem see a 30 per cent target as a tipping why, on the boards I’m on, we happily solving, decision making, innovation point mechanism for creating aspire to get there and beyond. and performance outcomes. It has momentum that enables female David Gonski AC, ANZ & Coca-Cola been my experience that having a voices to be heard around the board Amatil wide range of experiences, expertise, table. Several chairs view 50 per knowledge and points of view at the cent as more appropriate whilst Spark aims to have 50 per cent table changes the dialogue, not only others think the number should be representation of non-executive around risk, but also performance. determined by the particular skills, directors who are women. Dr Brian Clark, Boral thinking and experiences required to Dr Doug McTaggart, Spark complement other board members Infrastructure For me, diversity is about far more and the circumstances of the than just gender. Getting the right organisation. What is generally agreed by the gender balance is a good first step, chairs is that a minimum of 30 per but I believe it is absolutely critical If gender diversity is supported, and cent appears to create optimum to ensure you have the right mix it should be, then there is no doubt boardroom dynamics so that the of age, background, experience in my mind it is better to have more organisation benefits from gender and skills around the table to than one female director. It makes diversity. ensure the effective delivery of the them more comfortable and ensures organisation’s strategy. the board hears a range of views that Catherine Brenner, AMP are often different. Is 30 per cent right or wrong? I don’t know. If there The chair plays a crucial role in are quality choices it can easily be diversifying the board, but the whole more than 30 per cent. But 30 per board has to take responsibility cent is a good aspirational target and for the make-up of the board and it certainly ensures a better balance. I addressing the mix. observe more valuable interactions Robert Johanson, Bendigo & when you have at least 30 per cent. Adelaide Bank Rick Holliday Smith, ASX Despite universal agreement that What is the point where there are increased female representation sufficient female directors on the provides positive benefits to board that it becomes what you do, IF THERE ARE QUALITY CHOICES IT CAN EASILY BE MORE THAN 30 PER CENT. “RICK HOLLIDAY SMITH, ASX 30percentclub.org5 BOARD RECRUITMENT, SELECTION AND APPOINTMENT PRACTICES Board recruitment, selection and just gender-neutral; you also start the board needs to decide on the appointment processes are highly focusing more on diversity in the non-negotiable criteria and where dependent on the nature of the broader sense. flexibility is possible. It is rare to board, the life-cycle or stage of Margaret Jackson AC, Spotless Group find the ‘perfect’ candidate; there is the organisation and the style and usually compromise on one or two personality of the individual chair and The view that they are not available, criteria. Sometimes a candidate will board members. There are, however, that there is not a big enough pool, have one or two unique attributes a number of consistencies in the is a furhpy. But you have to be that the board did not previously processes adopted by these chairs. intentional, which doesn’t mean consider but which will add great Having a specific gender target proscriptive. You need to raise the value to the board and company. for the board does not, of itself, lead level of intentionality. to increasing the number of women Harvey Collins, Navitas You should always have an open on that board. The commitment of mind and be prepared to go off the the chair and directors is the main Succession planning, in terms sheet for a certain person. If there determinant in securing such an of trying to understand the is a particularly attractive candidate increase. Boards with committed future strategic direction of the that doesn’t quite fit into the box, we chairs and directors are willing organisation several years into the are open to that. for the search process to take future and deciding when it may Peter Cosgrove, APN News & Media longer if necessary in order to find be most appropriate for particular the right candidate, to engage in directors to retire in order to make Boards often use search consultants, succession planning earlier and to way for different skills, thinking or but not always.