Being appointed to an ASX 200 board

A new AICD report analyses all ASX 200 board appointments over a two year period to find out what type of director is being called up to Australia’s biggest boards.

Most directors appointed to ASX 200 boards do not have previous ASX 200 board experience and come from business operations and general management roles, according to new research conducted by the AICD.

The research paper Female and Male Director Appointments to ASX 200 Boards found that the expertise and sector experience of male and female appointees was strikingly similar, with business operations and general management the most common area of expertise, followed closely by finance and accounting. The majority of appointments were for organisations in the finance sector and appointees tended to be drawn from the banking, finance and insurance sectors. The report argues that while this has obvious advantages, an extensive body of research (conducted by Bain &Co and others) has identified businesses benefit from a diversity of background and experience at board level.

The report also also identifies a shift away from the “golden skirt” phenomenon in which only women with prior or current ASX 200 directorships are appointed to other ASX 200 boards. The overwhelming majority of female (81.5 per cent) and male (69.8 per cent) appointees did not already hold an ASX 200 board role at the time of their appointment. Similarly, most female (57.1 per cent) and male (62.5 per cent) appointees did not have a current or previous ASX 200 non-executive board appointment.

This report expands on research conducted by the AICD in 2015 that analysed the female non-executive director appointments to ASX 200 boards from 1 January 2010 – 1 January 2014. The latest report, which covers 1 January 2014 – 1 January 2016, also includes male director appointments and compares and contrasts the backgrounds and experiences of both genders. The report demonstrates the significant progress in the number of females sitting on ASX 200 boards over the report’s two year period.

Significantly, the larger the ASX company, the greater the number of women sitting at the board table. Female directors held 26.1 per cent of directorships on ASX 100 boards rising to 28.6 per cent on ASX 20 boards. The proportion of women on ASX 200 boards has increased from 17.3 per cent in January 2014 to 23.8 per cent in August 2016.

Other key findings from the report:

• There were 64 male executive director appointments in 2014 and 2015. There were only three female appointments in the same timeframe.
  
• Nearly a third of the female appointees are past mentee participants in the AICD’s Chair’s Mentoring Program.
• The majority of female appointees are members of the AICD (80.7 per cent including Fellows) as opposed to less than half of the male appointees (43.1 per cent including Fellows).

Future research will be conducted to compare the male and female appointments to ASX 200 boards and to analyse whether the background, skills and experience of appointees change significantly over time.

For further information and to access the report, see Female and Male Director Appointments to ASX 200 Boards.