Directors of ASX200 companies have been warned by the Australian Council of Superannuation Investors (ACSI) that they will face votes against them if their board is less than 30 per cent female.
In a statement, ACSI explained the formal voting strategy had been implemented to support a target the industry body adopted last year to have women comprise 30 per cent of all ASX200 boards by the end of 2017.
The group implemented this target “based on the belief that skilled and suitably diverse boards make for better-governed companies”, and in a letter to companies with less than 10 per cent female board representation ACSI chief executive Louise Davidson warned current directors they may not be re-elected.
“Where ACSI believes that a company has demonstrated no progress in either changing the make-up of its board, or in presenting a clear plan to achieve that 30 per cent target, it will begin recommending that its members oppose the re-election of existing directors,” she said.
The body said it was backed by “a strong mandate” from member organisations, which collectively “represent over $1.6 trillion in investments and own approximately 10% of the average ASX200 company”.
“This is not an issue we take lightly, and we sincerely hope that by the time of next year’s annual meetings no companies will be in the firing line,” Ms Davidson added.
“ACSI is not the only organisation to see the value in increased board diversity, but in the face of multiple campaigns, some boards are just not getting the message – and are now seriously out of step with their peers.”
In October 2015, ACSI cautioned they would implement such a voting policy if "attempts by ACSI to engage at a senior level are ignored", or if boards failed to implement short-term strategies to effect a change in board composition.