Reframing boardroom representation as a ‘governance capability, not a diversity measure’

As Australia’s boardrooms begin to reflect the population more accurately, one body is calling for legislated gender objectives to continue the momentum.

In its submission to the ASX 5th Edition Corporate Governance Consultation, senior female leadership organisation Chief Executive Women (CEW) proposed a formal benchmark to recognise the movement already occurring within Australian boardrooms.

In acknowledgement that many of Australia’s largest listed companies are moving closer to gender-balanced boards, CEW is campaigning for the ASX to adopt a 40:40:20 gender diversity objective for S&P/ASX 300 boards that would require a 40 per cent representation of women, men, and another 20 per cent of any gender.

According to the Watermark Search International Board Diversity Index, women now hold 20 per cent more ASX 300 board seats than a decade ago, approximately 38 per cent.

Further, seats in the ASX 100 and higher incidences, and ASX 20 boards, are now held by women at a 40 per cent and 43.8 per cent rate, respectively.

CEW chief executive Lisa Annese said the governance principles should act as a pathway for the future.

“The role of the ASX principles and recommendations is to encourage best practice governance across Australia’s largest listed companies. On board gender balance, the best practice is now 40:40:20,” she said.

Citing the 40:40:20 benchmark as one used by the Australian Council of Superannuation Investors since 2019 – and a 30 per cent minimum as an expectation rather than a goal, Annese said: “Setting a benchmark below what many companies have already achieved does the opposite. It gives the market no direction for future appointments and signals that a step back would be permissible.”

“This progress has been years in the making. The principles should protect it and encourage companies to build on it.”

Similarly, Annese noted that board diversity is also connected to business profitability, with a 10 per cent lift in women’s representation connected to a 4.9 per cent increase to market value, proving that “progress on gender diversity does not have to come at the expense of other forms of diversity, as has been suggested. Australian boards can pursue both”.

In the same way that female representation benefits business, Annese added: “Women are not a homogeneous group.”

“Women from culturally and racially diverse backgrounds, First Nations women, women with disabilities, and women with varied professional experience are all part of the pool boards appointed from.”

“It is precisely this diversity of lived and professional experience that brings diversity of thought to the table.”

According to CEW’s Senior Executive Census 2025, ASX 300 companies with the 40:40 gender target were 2.7 times more likely to achieve gender balance, and exhibited an 11 per cent higher representation within executive teams.

Annese explained that these findings thereby point to the need for a boardroom-level benchmark, adding: “It would be a mistake to set a target the market is already surpassing, and to put the progress boards have made on achieving gender balance at risk.”

The CEW is formally calling for a gender objective to be recognised in Recommendation 2.3(c) and has also urged the preservation of a proposed disclosure on how succession planning is conducted.

The ASX is due to release its final recommendations by the end of 2026.

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