Calls for new pathways to improve First Nations representation on boards

The boards of some of Australia’s largest companies are still lagging behind when it comes to ethnic and cultural diversity, the Governance Institute of Australia has said, calling for new pathways to support First Nations people to ‘have a seat at the table’.

 

The latest snapshot of Australia’s boardroom diversity has found a small but positive improvement in the representation of First Nations’ people in the nation’s top companies but that broader cultural and ethnic diversity continues to stall.

 

The 2023 Board Diversity Index from Watermark Search International and the Governance Institute of Australia found First Nations board representation in the top 300 ASX listed companies increased slightly from two to four directors holding six seats over the past year.

 

In response, Governance Institute Fellow and Chair of the Aurora Education Foundation Charles Prouse said companies and recruiters need to create new pathways to improve representation on corporate boards.

 

“How you find First Nations board members is not going to be the same as how you find the current board member. You’re looking in the wrong places,” he said.

 

While “hundreds” of First Nations people hold board positions on Indigenous and non-Indigenous organisations, Mr Prouse said, where they navigate complex governance issues, they are often centred around the areas of education, health, economic opportunity and justice.

 

Governance Institute Chair Pauline Vamos said it’s good governance for boards to consider all facets of diversity in their composition, to avoid ‘groupthink’ and deliver better decision-making processes for their stakeholders.

 

“In the year where Australians will participate in a referendum on an Aboriginal and Torres Strait Islander Voice to Parliament, it is perhaps timely for companies to consider how they can boost Indigenous voices in the boardroom,” he added. 

 

David Evans, Managing Partner of Watermark Search International, went one step further, saying that the analysis shows that the progress which is happening is happening “at a glacial pace”.

 

“We regularly challenge chairs and boards to look beyond the initial tight criteria of just ‘experience on a similar board’ and really focus on what other people might add to the board’s conversation,” he said.

 

Other key findings from this year’s report include:

 

• Representation of women on boards has risen to 35 per cent (up from 32 per cent in 2022)
• There’s been a surge of women on smaller company boards (up 15 per cent in 2022)
• 15 of ASX Top 300 boards have no female directors
• Only 10 per cent of directors are from non-Anglo-Celtic backgrounds
• The average age of board directors and length of tenure remains steady.

 

Australia is behind other similar nations such as UK and US in collecting and reporting specific data, with growing calls for more people with disabilities and those from lower socio-economic backgrounds to help guide corporate boards on how to improve interactions with customers, said Mark Baxter, co-founder of the Australian Association of LGBTQ+ Board and Executive Inclusion (ALBEI). 

 

“The lack of data does not mean a problem with representation for these groups does not exist. It probably means the problem has not been actively considered,” he added.

 

Mr Baxter’s input adds an additional layer of context to the findings, because self-disclosure from some minority groups is an issue. 

 

“ALBEI estimates between 10-15 people who identify as LGBTQ+ are currently on ASX200 boards, though we don’t have enough data to work with yet,” he said.

 

“Some of our members, particularly men, are reluctant to disclose, fearing career repercussions due to the sense that ‘traditionally masculine leadership’ is more desirable.”

 

Download the full report here.