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Call for more diversity on corporate boards

17 June 20220 comments

Australian companies need more directors from diverse backgrounds on their boards to drive innovation and creativity, according to a leading lawyer and corporate figure.

Katrina Rathie, the former head of law firm King and Wood Mallesons, said that there was a clear business case to include more people from culturally diverse backgrounds on corporate boards.

“People from diverse backgrounds bring lived experience and innovative and creative thinking that drives growth,” Ms Rathie told the recent Federation of Ethnic Communities’ Councils (FECCA) 2022 Conference held in Melbourne.

She told the conference that research by the Governance Institute showed 93 per cent of ASX 100 company board member were white men and women; and 90 per cent were form Anglo-Celtic backgrounds.

Ms Rathie said there were just 18 non-Anglo board members on ASX 100 listed company boards and the number of culturally diverse females on ASX 100 boards was less than five.

“More cultural diversity is an urgent requirement for ASX boards,” she said.

Ms Rathie said smart boards were already engaging search agencies to find culturally diverse talent.

And she suggested the creation of data bases of talented multicultural people to help companies improve the diversity on their boards.

Unlike other countries, Australia’s stock exchange did not require a minimum number of diverse board members, she said.

“In the US, the Nasdaq requires women and LGBTI people on boards and the Parker Report in the UK will require FTSE companies to have a least one culturally diverse board member by 2024,” said Ms Rathie, who was winner of the Board and Management category in the 2019 AFR 100 Women of Influence Awards.

Research in the US by Forbes Magazine showed that the 43 most diverse public corporations were 24 per cent more profitable than the S&P 500 average. And that almost 95 per cent of directors agree that diversity brings unique perspectives.

The research paper said workplace diversity and inclusion allowed businesses to build teams that bring different viewpoints and talents to the mix, increasing innovation and driving higher revenues.

It said a culturally diverse workplace empowered people to develop their talents and skills. And a range of ideas and expertise enabled those to learn from a more diverse collection of colleagues.

“It can also boost problem-solving capabilities and increase happiness and productivity. In an environment where all voices are heard, this spirit of innovation and encouragement to contribute can drive business success,” the Forbes report said.