Small caps dragging their heels on asking women to join boards

Small cap boards may think that, like with ethical and environmentally-focused shareholder voting, they are fairly immune from pushes to include more women directors.

However, investors are beginning to highlight those unwilling to make changes.

Not quite a quarter of all ASX companies have a single woman in their boardroom — 24.2 per cent — according to data today from the Australian Institute of Company Directors (AICD).

Pro Medicus (ASX:PME), still a small cap only just over two years ago, is one of the companies the AICD has called out for not refreshing its board so it’s not solely male.

Hub24 (AX:HUB) which has a market cap of $670m and therefore is only just not a small cap, has also been called out.

“It is still the top Australian companies that lead the way on gender diversity,” AICD CEO and managing director Angus Armour said.

“However, while 30 per cent women has been achieved at an aggregate level on ASX200 boards, our research shows there are still 100 companies who have failed to reach the 30 per cent target. It is worth noting that 34 companies still only have one female director and six companies still have none.”

The others in the six ASX200 companies with male-only boards are TPG Telecom (ASX:TPG), NRW Holdings (ASX:NRW), Silver Lake Resources (ASX:SLR) and New Hope (ASX:NHC).

ASX300 unwilling to change

The ASX300 figure for the number of women on boards is 28.2 per cent but the heavy lifting is done by the largest companies in the index, not the smallest.

The ASX300 includes a number of small cap companies, from Senex (ASX:SXY) to water favourite Phoslock (ASX:PET).

There are 15 companies in that section with no women on their boards.

Code	Name	Price $ (Feb 2019)	Price change 1 year (%)	Market Cap $
BGL	BELLEVUE GOLD LTD	0.575	-6	$327.7M
WAF	WEST AFRICAN RESOURCES LTD	0.575	125	$500.5M
EHL	EMECO HOLDINGS LTD	2.4	14	$839.7M
RFF	RURAL FUNDS GROUP	2.06	1	$693.5M
NGI	NAVIGATOR GLOBAL INVESTMENTS	3.42	22	$554.5M
MLD	MACA LTD	1.01	7	$270.7M
PDN	PALADIN ENERGY LTD	0.093	-50	$188.6M
RDC	REDCAPE HOTEL GROUP	1.135	19	$626.7M
KGN	KOGAN.COM LTD	5.07	24	$479.7M
SLC	SUPERLOOP LTD	0.8	-46	$292.7M
INR	IONEER LTD	0.185	23	$310.8M
DCN	DACIAN GOLD LTD	1.4	-46	$319.8M
CVN	CARNARVON PETROLEUM LTD	0.31	-14	$485.0M
NCZ	NEW CENTURY RESOURCES LTD	0.19	-77	$121.2M
SDA	SPEEDCAST INTERNATIONAL LTD	0.79	-73	$189.4M

Vote him off

Opening the boardroom door to a woman is not just diversity for diversity’s sake.

There is a considerable body of research showing gender diversity has a positive effect on corporate returns, at minimum because it brings new perspectives to the table.

Data from not-for-profit organisation Catalyst shows a strong link between the presence of women in boardrooms and company reputation, while a Credit Swisse study in 2016 found gender diversity was “linked to excess stock market returns and superior corporate profitability”.

The AICD wants to see a 40:40:20 balance on boards, although it has a target of 30 per cent women for now.

Armour says practically, this means 40 per cent of both women and men, with the remaining 20 per cent being of any gender, allowing boards with uneven numbers or a natural turnover of directors.

AustralianSuper said in September 2019 it would vote against the election of the most senior director up for reappointment at 52 listed companies if they didn’t have at least two women on their boards.

Australia’s largest super fund initiated a policy in 2016 of voting against the next director up for re-election of ASX200 companies with no female directors.