Currently in Australia, there is a growing push for a public policy shift towards a 50-50 target for gender representation on boards of companies.
This push is a way in which both government and businesses are looking to achieve Target 5.5 of the United Nations' Global Goals for Sustainable Development. This target states that we must, "Ensure women’s full and effective participation and equal opportunities for leadership at all levels of decision-making in political, economic and public life" as part of Goal 5: Gender Equality.
While there is some debate as to whether or not this is the best method for achieving gender equality by 2030, meeting these targets is one of the best solutions offered to date in order to see women equally represented in board positions.
To date, many companies have set their own targets, without the need for public policy to be changed, as part of the company's own commitment to social sustainability.
The Australian Institute of company Directors have set a target for ASX 300+ companies to achieve 30% female board representation by the end of 2018.
Currently, there is only an average of 9% female board representation in ASX 300+ companies, a much lower statistic to the 23% average female board representation in ASX 200 companies.
Unfortunately, 65% of ASX 300+ companies have no female representation on their boards, a disturbingly high figure for 2017. Of these companies, only 21 (3%) employed a female CEO.
Having female board directors and executives in a company isn’t just a way to tick a box in corporate sustainability; it actually provides benefit to the company.
According to a recent KPMG report, ASX 300+ companies with female CEOs saw a 9% increase in revenue compared to the average of all ASX 300+ companies - 0.5% increase.
Other benefits include a higher return on sales and higher return on equity and more effective risk management. There are also benefits when it comes to addressing concerns of stakeholders, including customers, employees and shareholders as well as the broader community. Given that women drive between 70 to 80% of purchase decisions, there is a strong business case for women to be in leading positions.
At Strategic Sustainability Consultants, we understand some organisations’ concerns around setting gender diversity targets, not only on company boards but within senior positions in organisations. There are other options for a company to achieve gender equality within an organisation, including setting gender hire targets or gender promotion targets. To discuss these options further, contact a member of our team today!