Culturally diverse leaders needed on ASX100 boards: new report

30 July 2018
Australia's top 100 ASX listed companies are governed by boards that fail to reflect the nation's cultural diversity and need to move 'beyond the pale', according to a new University of Sydney Business School report.

The ground-breaking report, ‘Beyond the Pale: Cultural Diversity on ASX 100 Boards’, which is based on interviews with non-executive board members and executive recruitment firms, calls on leading firms to consider establishing cultural diversity targets for their most senior ranks.

“Earlier studies have indicated that around 90 percent of CEO and other senior executives have Anglo-Celtic or European backgrounds and this latest research indicates that the composition of ASX 100 boards is very similar,” said Associate Professor Dimitria Groutsis.

Bureau of Statistics figures show that just 58 percent of Australians have an Anglo-Celtic background while around 18 percent have a European heritage. More than 20 percent are non-European and 3 percent are Indigenous.

And yet, Dr Groutsis says, board members are overwhelmingly Anglo-Celtic men who “display traditional male leadership traits” and who are drawn from male dominated business networks. 

Our interviewees made it clear that in order to get somewhere, you needed to keep your head down, speak with an Australian accent and belong to a matey club.
Associate Professor Dimitria Groutsis, report author

The Beyond the Pale report quotes one of Australia’s few non-Anglo board members as saying that she was “tired of being asked about recipes from her homeland rather than being listened” to by her colleagues.

The report follows earlier Business School research which found that no more than 5 percent of leadership positions within the ASX top 200, federal parliament, the public service and Australia’s universities are held by people from non-European cultural backgrounds.

Research for the Beyond the Pale report was undertaken by Dr Groutsis, Professor Rae Cooper and the Dean of the Business School, Professor Greg Whitwell. It was supported by the Australian Human Rights Commission and the Australian Institute of Company Directors (AICD).

In the report, Race Relations Commissioner, Dr Tim Soutphommasane, describes Australia as a “multicultural triumph”. However he also says that it’s time for more cultural diversity in the leadership of organisations. “There’s a challenge to get board diversity right – and not just on gender. This research will guide the action leaders need to take.”

The Managing Director and CEO of the AICD, Angus Armour, is quoted as saying that while his organisation is “an active voice advocating for increased gender diversity in Australian boardrooms, we recognise that cultural diversity is an important, and to date, under-researched topic”.

Launching the report, Professor Whitwell warned that by failing to take advantage of the nation’s cultural and linguistic diversity, Australia’s ASX Top 100 companies were impeding their own performance.

“Diversity inherently provides the opportunity to hear and explore different perspectives and viewpoints which leads to greater creativity and better decision making,” Professor Whitwell said. “It should also lead to more robust questioning of assumptions.”

Beyond the Pale concludes with a series of recommendations on broader networking opportunities, the development of more transparent pathways to board membership, an examination of other diversity campaigns and the possible introduction of diversity targets.

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