2015 borsellino adams board diversity link corp gov - uts conf asx sydney final-version_2
TRANSCRIPT
Identifying a positive link between corporate governance
and board diversity
Grace BorsellinoProf Michael Adams
School of Law
20th May 2015
New Horizons in Corporate Governance, UTS, ASX, Sydney
Benefits
• Hotly contested across many academic fields, however evidence is clear:
• Claessens & Yurtoglu 2012 UN study• “Business case for diversity” Wang & Clift• Clarke & Adams ARC 2007 project• Korn Ferry Institute 2015 Asia Pacific
Diversity
• Wang & Clift in “business case for diversity” state after 20 years of corporate boards in UK, USA and Australia remain dominated by white males!
• CAMAC 2009 report notes more than gender: age, ethnicity, socio-economic, cultural background, formal qualifications
• ASX Recommendation 1.5 focus on gender, but note other factors in policy
Board Diversity
Current Hot Topics• Diversity Council Australia and Deakin
University 2015 – Cultural Origins of ASX directors
• BlackRock 2015 – Achieving Gender Diversity
• Korn Ferry Institute 2015 Asia pacific result on 10 markets
2015 ASX Top 100
Company Total on Board of Directors
No Female Directors
Percentage of Females
Average Age of Directors
Ethnicity Company Ranking as at 30 January 2015
CBA 11 3 27% 61.2 1 No 1$145billion
Westpac 9 4 44% 58.8 0 No 2 $108b BHP 14 3 21% 62.1 0 No 3 $94b ANZ 8 2 25% 59 1 No 4 $91b NAB 13 2 15% 60.3 2 No 5$86b Telstra 10 3 30% 60.3 1 No 6 $79b Westfarmers 12 3 25% 58.8 0 No 7 $49b CSL Ltd 8 2 25% 61.6 0 No 8 $42b Woolworths 12 3 25% 61.5 1 No 9 $40b Woodside Pet 9 2 22% 57.6 0 No 10 $28b IAG 9 3 33% 57.8 1 No 20 $15b Computershare 7 2 28% 59.2 0 No 50 $6.5b Flight Centre Travel
5 1 20% 51.8 0 No 75 $3.8b
Adelaide Brighton
6 1 17% 60.3 0 No 100 $2.3b
Targets or Quotas
• According to 2014 Blackrock Report The voluntary targets of countries have a very slow (‘glacial’) change however 2015 Blackrock Report suggests treading with caution.
• Evidence demonstrates that there is progress with Australia’s current voluntary measures in place
Conclusion
Credit Suisse 2014 report states: “It is not a case of a greater ability of one gender versus the other but that a more diverse group makes for better decision making and corporate performance. The speed with which change will prove to be the most important and challenging variable.”• The voluntary process is progressing and if it
continues there is no need for quotas.