New data released by the Australian Institute of Company Directors last week highlighted that women now make up 29.7% of board members in the country’s ASX 200 index, a proportion that’s been achieved fast from a low base—and without the imposition of quotas.
Australia’s progress might seem more surprising given the political context: Female leaders and members of parliament have recently criticized a system they say is backward and discriminatory. Julia Banks, a Liberal MP, quit her party in August 2018 to become an independent. “The scourge of cultural and gender bias, bullying and intimidation continues against women in politics, the media, and across business,” she wrote in a statement. Other women speaking out over previous months had helped her make the decision, she added.
Globally, the past decade has brought about a shift toward seriously tackling the shortage of female representation at the big-company board level. There are two main approaches: Impose quotas with penalties, like de-listing companies or fining them if change isn’t achieved. Or, encourage companies to alter their board makeup through non-binding targets. Norway and France chose quotas, and are leading the pack with over 40% female representation in 2017. But other non-quota countries aren’t far behind, including Australia and the UK, the latter of which announced 29% female representation on its FTSE 100 company boards in 2018.
Australia’s change, from women holding just 10.2% of directorships in 2010, did involve some non-quota pressure. In 2017, for example, the Australian Council of Superannuation Investors, a membership body for investment firms, said it would vote against the re-election of board members at companies that failed to strive toward gender balance.
Angus Armour, CEO of the Australian Institute of Company Directors, told Australia’s ABC news that he was against quotas, but that the AICD was considering whether higher voluntary targets were needed. The group was keen to emphasize that the country had achieved over a 10 percentage-point change from 2015, when the AICD set the target of 30% by the end of 2018. (It missed that target by 0.3 percentage point.) Others have said it could be hard for companies to keep the level of women on boards stable or higher without quotas.
That is at least in part a pipeline problem. In almost all countries (paywall) there’s a woeful lack of women at executive level, making it harder for top companies to find board talent with relevant experience that fits the traditional profile of a corporate director.