ACSI, CEW push ASX to lift boards' gender targets

The peak body for superannuation investors and a women's advocacy group are calling on the ASX to set a 40:40:20 objective for gender diversity in the next edition of its Corporate Governance Principles and Recommendations.

In their submissions to the ASX's Draft 5th Edition Consultation Paper, Chief Executive Women (CEW) and the Australian Council of Superannuation Investors (ACSI) have separately backed the measurable objective, which would require at least 40% women, at least 40% men and allow up to 20% of any gender.

The paper recommends maintaining the 30% female director representation for boards of ASX300 in updating the principles.

"Additional numerical targets for other diversity characteristics or disclosure of these characteristics for individual directors are not proposed. This provides entities with flexibility to determine how best to achieve diversity of thought, experience and perspectives in their boards," the paper read.

CEW chief executive Lisa Annese said: "The role of the ASX principles and recommendations is to encourage best-practice governance across Australia's largest listed companies. On board gender balance, that best practice is now 40:40:20."

"Setting a benchmark below what many companies have already achieved does the opposite. It gives the market no direction for future appointments and signals that a step back would be permissible."

ACSI chief executive Louise Davidson said the proposal to retain the measurable objective that boards have at least 30% female directors is "concerning."

ACIS believes entities can and should be capable of setting a measurable objective for gender balance on boards, such as the 40:40:20 objective, while also taking other aspects of diversity into account in board composition and succession planning.

She urged the ASX to adopt a framework that encourages companies to build on progress rather than retain a benchmark that much of the market has surpassed.

"Gender balance and broader diversity are not competing objectives. Effective boards draw on a range of skills, backgrounds, experiences and perspectives to support decision making and long-term value creation," Davidson said.

CEW said its research shows that a 10% increase in women's representation on an ASX board was associated with a 4.9% increase in market value.

Annese also rejected suggestions that greater gender balance would come at the expense of other forms of diversity, saying boards could pursue both.

"Women are not a homogeneous group," she said, pointing to the importance of culturally and racially diverse women, First Nations women, women with disabilities and those with varied professional backgrounds.

ACSI also urged the ASX to retain specific timeframes when assessing director independence, warning that removing the 10-year reference could reduce transparency.

The ASX is expected to finalise the fifth edition of the principles by the end of 2026.