Shareholders begin voting against ASX200 directors for having no women on their boards: ACSI

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Shareholders begin voting against ASX200 directors for having no women on their boards: ACSI

By Nassim Khadem

Boards refusing to appoint a woman on their board are being punished by shareholders who are exercising their right to vote against reelection of directors at company annual general meetings.

The Australian Council of Superannuation Investors (ACSI) this year exercised its proxy voting power to move against some of the companies that are not moving to appoint women to their boards.

There are currently six companies on the ASX200 with no women on their boards.

This will rise to seven in a matter of days (Beach Energy will become a zero women board on November 23 when Fiona Bennett retires).

ACSI chief Louise Davidson says companies are under watch by shareholders.

ACSI chief Louise Davidson says companies are under watch by shareholders.Credit: Jesse Marlow

Companies refusing to move

Those refusing to budge include ARB, Australia's largest manufacturer and distributor of four-wheel drive accessories.

Those refusing to budge include ARB, Australia's largest manufacturer and distributor of four-wheel drive accessories.

Those refusing to budge include ARB, Australia's largest manufacturer and distributor of four-wheel drive accessories.Credit: Joe Armao

ACSI earlier this year exercised a large 12 per cent proxy vote against director ARB Andrew Stott (average vote against a director re-election in the ASX 200 is normally less than 4 per cent).

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The company was contacted for comment but did not respond by deadline.

Its corporate governance statement on its website states "the board has not adopted a formal diversity policy or set measurable objectives based on diversity alone" and "believes that this is consistent with its objective of generating long term shareholder value in an ethical manner".

Is it really 'merit' based?

ACSI CEO Louise Davidson said they had communicated with the ARB board on several occasions over the past three years to discuss shareholder concerns.

In response, ARB advised them that they had a merit based policy and do not discriminate on the basis of gender, age, ethnicity or cultural background.

But she said it's hard to understand how it is merit-based that ARB has not been able to fill a board role with a female director since 1989, some 28 years after listing.

"Some companies continue to resist change and cling to the idea that their hiring practices are based on merit," Ms Davidson said.

Four no votes in 2017 so far

Some companies continue to resist change and cling to the idea that their hiring practices are based on merit

Louise Davidson

"At the start of this AGM season, we said that we would vote against 10 companies on gender diversity grounds. In practice, we have only had to vote against four companies."

Aside from ARB, Ms Davidson said ACSI will be recommending an 'against' vote at the AGM of telecommunications company TPG Telecom on December 6 if no progress is made before then.

TPG, whose CEO and executive chairman is David Teoh, is now the only company in the top 100 publicly listed companies without a woman on its board.

TPG, whose CEO and executive chairman is David Teoh, is now the only company in the top 100 publicly listed companies without a woman on its board.Credit: Daniel Munoz

TPG, whose CEO and executive chairman is David Teoh, is now the only company in the top 100 publicly listed companies without a woman on its board.

Those under watch

Other companies aside fom ARB that have been voted against, but since taken steps to rectify the problem, or assured ACSI that they soon will, include:

-Flight Centre. At their AGM on November 9, chairman Gary Smith said the company would appoint Colette Garnsey, who will replace Cassandra Kelly who resigned last year.

-CIMIC Group. On September 30 it moved to appoint Kate Spargo, UGL chairman and non-exceutive director of Fletcher Building, Snowy Mountains Engineering Corporation, Sonic HeathCare and Investec.

-Australian Agricultural Company (AACo). On November 15 the beef company recruited Asian online retail specialist Jessica Rudd – daughter of former Prime Minister Kevin Rudd – to its board.

Australian Agricultural Company (AACo) recruited Asian online retail specialist Jessica Rudd – daughter of former Prime Minister Kevin Rudd – to its board.

Australian Agricultural Company (AACo) recruited Asian online retail specialist Jessica Rudd – daughter of former Prime Minister Kevin Rudd – to its board.Credit: Glenn Hunt

Those who made promises

The remaining no women boards are:

-Ardent Leisure Group, owner of Dreamworld, whose only female member Melanie Willis resigned in September.

-Galaxy Resources. ACSI initially recommended an 'against' vote, but changed this to 'for' when they confirmed they were in the process of appointing a woman director.

-Reliance Worldwide Corporation. ACSI initially recommended an 'against' vote, but changed this to 'for' when they confirmed they were in the process of appointing a woman director.

-Speedcast International. It is new to the ASX 200 and will not be holding its AGM until April.

ACSI members not perfect

ACSI's members include 37 local and overseas asset owners and institutional investors that collectively manage over $1.6 trillion in assets and own on average 10 per cent of every ASX 200 company.

Its own members have a long way to go to on gender diversity - not all of ACSI members have equal female and male representation on their boards.

While the no-women boards are reducing, according to Australian Institute of Company Directors data there are 64 companies that have just one female on their board.

"From our perspective, eliminating zero women boards from the ASX200 is only part of the job," Ms Davidson said.

Eliminating zero women boards from the ASX200 is only part of the job: ACSI Louise Davidson

Eliminating zero women boards from the ASX200 is only part of the job: ACSI Louise Davidson Credit: Josh Robenstone

Companies with just one woman

"There are still 68 companies in the ASX200 with only one woman on their boards. We plan to review our voting policy to turn up the heat on these companies."

Next year ACSI will publish a revised gender diversity voting policy with new incentives for companies to meet the 30 per cent target.

ACSI's proxy-voting service provides recommendations on all ASX300 companies on a range of issues including executive pay, human rights and climate risk.

In the 2016 – 2017 financial year, ACSI provided voting advice to its members on 1231 resolutions across the ASX200 (1774 resolutions including the ASX300). On average, they opposed 10 per cent of board-endorsed resolutions.

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