The Australian Council of Superannuation Investors (ACSI) has introduced new guidelines that will see it recommend against the re-election of board members who fail to meet gender diversity targets.
In a decision outlined in its updated governance guidelines which were released yesterday, ACSI said it will consider recommending against the re-election of directors who do not meet gender diversity quotas.
ACSI said the action will come where attempts by ACSI to engage at a senior level are ignored, a statement by the body said. It will also come if boards are unable to implement a strategy to address the issue in the short term.
In 2014, ACSI announced a policy target that requires 30 per cent of women to be present on each ASX200 board by the end of 2017.
“That target recognises that a properly structured board needs skilled directors who add diversity of thought to board decision-making,” the statement said.
“This is more likely to occur when directors have sufficiently diverse backgrounds.”
According to ACSI, there are now 40 companies who meet the policy target, with 25 also close to achieving it.
ACSI chief executive Louise Davidson said: “We’re pleased to see that since our policy and direct communication with more than half of the chairs of the ASX200 this year, an additional seven companies have added sufficient women directors to meet our 30 per cent target.”
ACSI has also placed executive remuneration under the spotlight, with the new updates reaffirming support for company boards with remuneration structures aligned to company strategy and designed to promote long-term performance.
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