Board succession planning hinders diversity efforts


Two-thirds of ASX 200 boards say they “always or sometimes” gravitate towards candidates who are known to board members when selecting new directors, hindering efforts to achieve gender diversity on boards, according to a survey by the 30% Club.
Directors who responded to the survey said it was easier to work with someone who was known to board members and who had established reputation in the market.
Susan Oliver, 30% Club Steering Committee member, said given the current small percentage of directors who are female, this leads to a “catch 22” situation for women.
“…Fewer females are known to directors, and this reduces the likelihood that females will be selected,” said Oliver.
Only 6.5 per of respondents sought outside advice on succession planning, and only 10.2 per cent of respondents cited the need for enhanced board diversity.
“The challenge in achieving gender equity is not one of supply but continues to be one of demand, with insufficient numbers of boards perceiving gender diversity as a strategy imperative,” said Oliver. “When chairs place too high a value on ‘collegiality and teamwork’, it can be sued as a code for ‘being like us’ and limit the opportunity for injecting innovative and diverse thinking.”
The Club posited that good succession should be based on skills, diversity and planning for the future rather than replacing like with like.
Other practices that hindered diversity efforts were the adherence to a de-facto fixed term for directors of nine or 10 years, as well as highly specific experience briefs.
Recommended for you
A financial advice firm has been penalised $11 million in the Federal Court for providing ‘cookie cutter advice’ to its clients and breaching conflicted remuneration rules.
Insignia Financial has experienced total quarterly net outflows of $1.8 billion as a result of client rebalancing, while its multi-asset flows halved from the prior quarter.
Prime Financial is looking to shed its “sleeping giant” reputation with larger M&A transactions going forward, having agreed to acquire research firm Lincoln Indicators.
An affiliate of Pinnacle Investment Management has expanded its reach with a London office as the fund manager seeks to grow its overseas distribution into the UK and Europe.