I recently represented Harwood Andrews at an International Corporate Governance Forum focusing on mandatory gender quota legislation. The forum featured overseas representatives from The Netherlands, South Africa, Germany and Norway, as well as corporate representatives from Australia.

The issue of gender quotas came to the forefront of legislative reform after Norway introduced legislation in 2004 requiring certain companies to have at least 40% females and 40% males on their boards. The introduction of this legislation was the catalyst for significant reform in this area throughout various countries:

  • In January 2013, new legislation came into force in The Netherlands requiring all large corporations to keep records of gender numbers and strive to reach a target of at least 30% females and 30% males on their boards. Notably, this legislation is based on the “Comply or Explain” principles and as such is not a mandatory quota.
  • In late 2013, Germany agreed that legislation should be drafted to force listed German companies to have at least 30% of their supervisory board members female and 30% male by 2016.
  • In early 2014, South Africa passed legislation requiring all organisations, corporations and government departments to have 50% females and 50% males on their decision making boards. This is the most dramatic example of gender quota legislation in the world.

Additionally, in November 2013, the European Parliament voted in favour of intended legislation to mandate large companies to have at least 40% females and 40% males on their boards.

Australia has not followed this trend except to the extent of requiring certain companies to report on the numbers of male and female employees and board members. Interestingly, according to statistics published by the Workplace Gender Equality Agency in October 2013:

  • Females hold 16.4% of ASX 200 directorships
  • 9.2% of ASX 500 key management personnel are female
  • 2.4% of ASX 500 CEO’s are female
  • 63.1% of ASX 500 companies have no female executive  key management personnel

Based on these statistics, it is clear that females are not progressing to senior management positions.

Throughout the forum, it became clear that the path to legislative reform in all of these countries started by imposing gender targets in relation to female and male representation on boards. If, after allowing a window for natural change, the target was not successful, the governments have then imposed a mandatory gender quota by introducing legislation.

Based on this general trend, it is likely that Australia will move towards adopting mandatory gender legislation in the future. However, the question of when, and to what extent, remains unanswered and will be influenced by continued pressure for change from lobbyists, politicians, corporate representatives and of course corporations.  

Nicole Stornebrink
Harwood Andrews
T: 03 5225 5209
E: nstornebrink@harwoodandrews.com.au