The head of one of the largest super funds is optimistic the nation’s businesses and public servants won’t follow the lead of US President Donald Trump in rolling back diversity measures, saying the belief in “inclusive and equitable leadership” was firmly entrenched in Australia.
HESTA, like other shareholders, has increasingly been using its voting might at annual general meetings to force publicly listed companies to push harder on improving gender diversity.
Last year, the industry fund, which caters to more than 1 million members in health and community services, urged the chairs and chief executives of ASX 300 companies it’s invested in to commit to ensuring 40 per cent of their staff are women.
HESTA chief executive Debby Blakey is optimistic Australia will not roll back its gender diversity targets. Credit: Eamon Gallagher
Hesta CEO Debby Blakey on Wednesday said the $91 billion super fund, whose members are overwhelmingly women, voted against the re-election directors and chairs at 47 companies, including Harvey Norman, Cettire and Guzman Y Gomez, over their gender diversity achievements.
“What sits at the core of this is our deep belief that gender diversity isn’t just about fairness,” Blakey said in an interview. “It is about smart business, and it is about improving the overall effectiveness and performance of companies.”
Blakey said HESTA has a policy to consider voting against directors if less than 30 per cent of a board is female, and against chairs of companies that employ single-gender executive teams. The fund has also expanded its policy to require companies to set targets to achieve gender parity across their entire organisation – not just at a board and executive level.
Diversity, equity and inclusion policies have been under the spotlight this past fortnight after Trump used his first day in office to dismantle the US federal government’s diversity, equity, and inclusion (DEI) programs, and a day later directed that all DEI staff be fired.
US companies such as Target, Amazon, Facebook parent Meta, McDonald’s and Walmart have already pulled back on DEI policies in recent months.
Blakey said rolling back gender targets would be disappointing as it would undermine years of progress and affect financial returns for shareholders, but she remained confident Australia would not adopt the US position.
“In Australia, we have actively engaged with companies and advocated for so long on the benefits of gender equality, and I am optimistic,” she said.
“There’s a lot of commentary, there are a lot of thought bubbles about this, but I think there is a deep understanding in Australia with the social fabric that we have built and that we hold dear that encourages us to maintain our positions on diversity.”
An Australian Council of Superannuation Investors report last year found 125 women were appointed to the boards of ASX300 companies, making up 46 per cent of appointments – and increasing female representation to 37.5 per cent, up two percentage points on the previous year.
But there is a growing split in the business community over the ASX’s latest version of diversity principles, which include reporting on board diversity.
Superannuation and investor groups are pushing for changes that would require directors to report on diversity criteria beyond gender, such as sexuality, age and disabilities, but have reportedly faced opposition from business representatives that sit on the ASX Corporate Governance Council.
Blakey said HESTA had spoken to the market operator about the need for better transparency on company diversity.
“I believe it’s helpful,” she said. “It’s helpful to debates, and it’s very helpful to investors in terms of the risks we see in companies that we invest in.”
Multiple studies have shown that organisations with higher levels of gender diversity tend to have better financial performance and outperform teams that are more homogenous.
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