Aussie Boards Becoming More Culturally Diverse - Report
17 March 2015 at 10:41 am
The Boards of Australian companies are becoming more culturally diverse but they are still not reflecting the diversity of the broader Australian community, a new report has found.
In the lead up to Harmony Day on Saturday 21 March, Diversity Council Australia (DCA) partnered with Deakin University to investigate cultural diversity in ASX Boards over the past decade
The report found that there has been a significant growth in cultural diversity on Boards in the past decade – by as much as 74 per cent and 61 per cent when it comes to chairs and directors from Asian backgrounds.
But it also found that in each of ASX 100, ASX 200 and ASX 500 listed companies only a quarter of Directors are from culturally diverse backgrounds (non-Anglo-Celtic) compared with a third in the wider Australian community, and only five per cent are from Asian backgrounds versus 8.5 per cent of the Australian community.
DCA CEO, Lisa Annese, said the findings show that while business is making some good progress, there is still some way to go.
“The good news is that cultural diversity on Boards is on the rise, especially when it comes to increasing directors from Asian cultural backgrounds. This is encouraging, given the economic importance of Asia to Australia,” Annese said.
“But the bad news is that people from Anglo Celtic and North-West European origins are still overrepresented on Boards, and other cultural origins are underrepresented when compared to the general population. Moreover, Board diversity amongst our largest companies and amongst CEOs, has been the slowest to change.
“This failure to take advantage of culturally diverse talent in some ways reflects our history, the waves of migration to Australia and perhaps our geographic isolation. And it is perpetuated by a leadership that continues to hire in its own image.
“Like gender diversity, however, cultural diversity on Boards isn’t just a nice to have. Research clearly shows that board-level and workforce cultural diversity are linked to enhanced organisational performance and firm profitability – particularly when organisations are pursuing innovation and growth strategies.
“The question needs to be asked, is the profit and performance of Australian companies being compromised by this lack of diversity?”
Key findings of the report were:
- Boards are getting more culturally diverse: 22 per cent increase in Directors from culturally diverse (non-Anglo-Celtic) backgrounds; 16 per cent increase in Chairs from culturally diverse backgrounds; 28 per cent increase in the number of ASX companies that have achieved a critical mass of directors from culturally diverse backgrounds.
- The percentage of Directors from Asian backgrounds is increasing: 74 per cent increase in Chairs from Asian backgrounds (3.5 per cent to 6.1 per cent); 61 per cent increase in directors from Asian backgrounds (5.9 per cent to 9.5 per cent); and 14 per cent increase in CEOs from Asian backgrounds (4.4 per cent to 5 per cent).
- The percentage of Directors from Southern, Eastern and Central European backgrounds is increasing: 20 per cent increase in ASX directors and 63 per cent increase in ASX 200 directors from Southern, Eastern & Central European backgrounds.
- There is slower progress in larger companies and among CEOs: 10 per cent increase in ASX 100 Directors from culturally diverse backgrounds versus 22 per cent increase among all ASX Directors; 5 per cent increase in ASX 100 directors from Asian backgrounds versus 61 per cent increase among all ASX directors; and 4 per cent increase in CEOs from culturally diverse backgrounds versus 22 per cent increase in directors from culturally diverse backgrounds.
- The top five Anglo-Celtic names dominate CEOs positions: 21 per cent of ASX CEOs in 2013 were called only one of five Anglo Celtic names (in order of frequency): David (68), Peter (53), John (48), Andrew (47), Michael (46).
Read the full report here.