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ALBEI Presentation

ALBEI Presentation

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2023 - ASX50 Board Diversity Governance

In what we understand to be the first piece of research into the diversity arrangements of ASX boards in Australia by Australians, ALBEI has found that 16 of the ASX50 have diversity and inclusion policies which apply to their boards and directors.

ALBEI's initial review of the governance frameworks of the ASX50 we uncovered that the news is not too bad - despite the lack of specific requirements for LGBTQ+ or other minority demographic reporting. However, the message is far more nuanced when it comes to major boards embracing diversity in all its forms and not just in respect of the LGBTQ+ community.

It was a relief to find that far more than one company in the ASX50 had diversity policies which applied to Directors and that the Nominations Committee had to consider diversity when considering the appointment of new non-executive directors. However, in many instances there seemed to be a disconnect between the reporting of diversity statistics and the actual board approved policies that are in place. Where there was ambiguity about whether the policies applied to the directors or board these were not included in the numbers – however the number could be higher.

​The 2023 Board Diversity Index from Watermark Search International and the Governance Institute of Australia was published in April 2023.  It is sobering to realise that in Australia 90% of directors on the ASX200 are of Anglo-Celtic background, we have roughly 12 LGBT directors, 4 First Nations directors and we have not been able to determine the number of disabled or people from lower socio economic backgrounds.

Our approach:

In 2023 the ASX Corporate Governance Principles and Recommendations does not yet provide for any specific reporting on boards beyond binary gender markers.  Therefore there is no 'cookie cutter' approach to board governance frameworks within Australia at this time and many companies have evolved their own nuances which need to be interrogated.

In conducting our initial review of the ASX50 companies we have reviewed the Diversity & Inclusion Policy of a company to see if it applied to its directors.  We then have reviewed the Nominations Committee (or equivalent) Charter to see if there was an obligation to consider diversity and then to the company’s Corporate Governance Statement to see how “diversity” was reported in the public domain. Further, where the wording of the diversity and inclusion policy is ambiguous this is sometimes clarified by the Corporate Governance Statement or other artefacts.

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