‘Isn’t it everyone’s own business?’: Controversy surrounds ASX proposal for company directors to disclose sexuality

A gay leading Australian businessman has expressed concerns about an ASX move he fears could “encroach on privacy and people’s individual lives”.

A gay leading Australian businessman has slammed a proposal for company directors to disclose their sexuality, saying it forces business leaders to share personal information against their will.

The ASX Corporate Governance Council is proposing to expand diversity reporting beyond gender to include sexuality, age, ethnicity, and skills.

The proposals follow similar guidelines in the UK, where companies are required to appoint at least one board member from a cultural minority group.

In the US, the NASDAQ exchange has also announced plans to introduce new board diversity rules, which mandate that companies have a woman, an “under-represented minority”, or an LGBTQI+ board member.

Just 34 per cent of board members in Australia are women, and less than 0.3 per cent of Fortune 500 companies are ran by openly LGBTQI+ people.

However, ANZ chairman Paul O’Sullivan, who also chairs Western Sydney Airport and Optus, expressed caution regarding the potential privacy implications.

Paul O’Sullivan expressed concerns about the proposal for company directors to disclose their sexuality, emphasising the importance of individual agency over such personal disclosures. Picture: Arsineh Houspian

“I think the intent is good. People are wanting more diversity,” Mr O’Sullivan said, as reported by the Australian Financial Review on Thursday morning.

“But I also think we’re starting to encroach on privacy and people’s individual lives.

“I think it’s appropriate to have the opportunity to disclose if you wish.”

Mr O’Sullivan emphasised that agency over disclosures about sexuality is a deeply valued principle within the LGBTQI+ community.

“Some people are reluctant to disclose,” he noted.

“Certainly in the LGBTQI+ community, it’s generally the case that it’s somebody’s own decision when they want to disclose their sexual orientation.

“I’m blessed. I can be open about who I am, but there are many people who are not in such an advantaged position.”

The ASX Corporate Governance Council proposed expanding diversity reporting to include sexuality, age, ethnicity, and skills, aiming to enhance diversity in company leadership. Picture: NCA NewsWire / Gaye Gerard

The response from the business sector and commentators has been mixed.

2GB’s Ben Fordham questioned the necessity of such disclosures, asking listeners on Thursday morning: “The idea that you would ask business leaders ‘are you gay?’ Isn’t it everyone’s own business?”

“And aren’t we going backwards by asking people who they are and how they identify? Just let them do their damn job,” he added, stating he had a personal awakening in recent years about approaching such discussions in the workplace.

Meanwhile, others in the sector have shown hesitation about the proposed changes.

Governance Institute of Australia Chair Pauline Vamos argued that mandatory disclosure could have unintended negative consequences.

“For (disclosure) to apply to a whole industry or to the Top 300 listed companies means it has to be a standard, and then you get boilerplate examples, which is not necessarily what shareholders need,” she recently told the ABC.

Mandatory disclosure of personal characteristics for company directors has received mixed responses from the business sector and commentators. Picture: Brendon Thorne/Getty Images

“Boards are seen as a collective. In terms of the workplace, it’s a different set of statistics.”

“When you’re sitting on a board, you bring a collection of skills and lenses, and how relevant they are really depends on where that business is at the time, the type of business it is, and its maturity.”

“We’ve always got to look at the unintended consequences of any change,” she said.

Diane Smith-Gander AO, co-chair of the fintech company, Zip also expressed reservations, telling the AFR earlier this month: “I don’t support the extension of the guidelines to include rules about the personal characteristics of directors.”

“I don’t think anyone should be compelled to make disclosures about their personal information if they don’t want to,” she said.

KPMG welcomed the proposed changes, stating that they would promote contemporary ‘best-practice’ governance and lead to greater transparency and trust in corporations. Picture: NCA NewsWire / Andrew Henshaw

Conversely, the Australian Council of Superannuation Investors (ACSI) supported the changes, arguing that “appropriate disclosure of director skills and experience is crucial for investor insight into the board’s ability to govern the entity effectively” in a statement to the ASX.

“ACSI’s view is that in selecting directors, the board should consider a range of diversity factors that could add value to board decision-making through varied perspectives, including but not limited to gender, age, LGBTQI+ identity, education and professional experience, socio-economic background, religion, ethnicity, and/or experience living with disability.”

Consulting powerhouse KPMG also welcomed the proposed changes, stating that they would promote “best-practice” governance aligned with the environment in which Australian listed entities operate.

“The proposed changes will lead to greater transparency and thus, a higher level of trust in corporations,” it said in a statement.

“In addition, the changes are aligned with the goal of reducing compliance costs, increasing productivity, and promoting transparency and diversity in corporate governance.”