More females on ASX300 boards, but study finds leadership roles still lagging

Female representation on the boards of ASX300 companies has risen over the past two years, but the CEO and chair positions remain dominated by males, according to the latest analysis by a study into the changing face of corporate Australia.

Ownership Matters, a governance advisory for institutional investors, has revisited its inaugural study of female board representation released two years ago to find that female directors of Australia’s top 300 listed companies now hold a record 34.2 per cent of positions.

Boards of these companies added a net 40 new female directors over the past two years, lifting their numbers to 717 of 2,098 total board members.

This compares with just 117 positions in 2005, which represented just 9.6 per cent of total board representation.

In another key finding, the Ownership Matters study says that within the ASX100, all-male boards have vanished while the ‘two remaining outliers’ in the ASX200 - Core Lithium (ASX: CXO) and De Grey Mining (ASX: DEG) - both appointed their first female directors in 2023.

The latest findings by Ownership Matters follow the release of the consultancy’s ground-breaking study in 2021 that investigated the rise of female board representation between 2005 and 2020.

In its analysis, which also reveals an increase in the representation of independent directors across ASX300 boards over the past two years, Ownership Matters laments that female leadership in the big end of town is still lagging with women 'significantly under-represented’.

Only four of the 290 sampled entities across the ASX300 – namely AMP (ASX: AMP), Bendigo and Adelaide Bank (ASX: BEN), Lynas Rare Earths (ASX: LYN) and Spark New Zealand (ASX: SPK) - have a female chair and CEO, it says.

Among the ASX100, there are only 10 female chairs and 13 female CEOs, while executive leadership among females drops to just three CEOs in the second 100 of the ASX300 and five in the third 100.

Female chairs are more likely to be found in the back 200 of the ASX 300, with 23 in total.

“Whilst more than one in three non-executive directors are now female, it is surprising that this cohort has still only produced 33 chairs across the largest 290 companies that we surveyed,” says Ownership Matters director Dean Paatsch.

“And of the 15 highest-paid professional directors in 2022 who received more than $1 million in fees, only one female (Maxine Brenner) features.

“The men are allowing record numbers of female directors into the tent but are yet to meaningfully hand over the best paid chairing roles.”

Meanwhile, the study has also found a surge in non-executive directors to 81.2 per cent of all ASX300 directors, while in ASX100 companies a record 93.1 per cent of these are independent directors.

This compares with the original study from 2005 to 2020 which revealed that non-executive directors made up only 70 per cent the total ASX300 board members.

The study found that the number of non-executive directors losing their independent status by holding options or rights incentives, similar to management, reached a record low of just eight among ASX100 and ASX200 companies.

“Non-executive directors with options or other leveraged incentives used to be very common 20 years ago, but this practice has now pretty much been eliminated in the ASX200, which is a substantial governance achievement for Australian public companies,” Paatsch says.

“When NEDs (non-executive directors) sign-off on incentive schemes for management, they are now overwhelmingly not conflicted by being paid through similar schemes.”

However, Ownership Matters also says that a lack of alignment between the interests of directors and shareholders remains an issue for Australia’s top companies.

It says investors broadly support the concept of NEDs having some ‘skin in the game’ by owning shares in the company they represent.

Among the non-executive directors of ASX100 companies, 50 had no shares in that company, while that rises to 72 among the ASX200 and 86 in the ASX300.