More diversity needed on top ASX boards, survey finds

Don’t shut down something because you feel slightly uncomfortable, says Telstra chairman John Mullen, as a Deloitte report recommends reserving sets for diverse voices.

Telstra chairman John Mullen. As a director, ‘you want somebody who’s their own master, who speaks up most vigorously to defend their point of view’. Picture: AAP

Telstra chairman John Mullen wants boards to be bold in choosing new directors, offering his own experience at the telco as a case study on how he is trying to keep pace with changing competitive and societal demands of the top floor.

In the last two years, the Mullen-led company has appointed millennial tech start-up founder Bridget Louden – who had no experience as a director at the time – and former AustralianSuper chair Elana Rubin to the board of the ASX-listed giant. He says they bring voices that challenge every topic from a different perspective.

Mr Mullen was central-casting in a survey by Deloitte and the 30% Club Australia – which campaigns for 30 per cent of women on ASX 200 boards – published on Wednesday.

The survey interviewed 31 current non-executive directors and chairs on ASX 200 boards – 65 per cent of whom were women. Directors surveyed say the new challenge requires a proactive and supportive chair who should consider setting aside board seats – one to three seats for a board size of seven to 10 seats – to introduce fresh and diverse thinkers.

“Take a chance and see it through,” Mr Mullen says.

“Don’t shut down something because you feel slightly uncomfortable, or it isn’t quite working out. You want somebody who’s their own master, who speaks up most vigorously to defend their point of view.

“You can look at people who would never even get considered for a major board role – and because it’s three out of ten, if you make a mistake, is it the end of the world?”

The survey found that the post=pandemic operating landscape needed more diversity of thinking to handle new risks and opportunities and that an emerging group of directors were experimenting with new appointments from further afield than traditional chief executive and CFO candidates in a search for future-fit directors.

Several interviewees suggested diversity could have avoided decisions that damaged reputations as societal expectations shift. “Indigenous issues, Me Too, respect at work: companies / boards that are struggling now are the ones that have been blind to social factors such as gender quotas and cultural issues” said one.

Core skills are still required but many of the directors interviewed suggest boards should look at capabilities in investor and government relations, regulation, marketing, sustainability, organisational development and digital.

“Taking a gender diversity lens to this potential talent pool, some board directors noted that women were more likely to work in these areas and hence a broader pool of technical capabilities will also help boardrooms achieve greater gender balance,” the survey noted.

Mr Mullen stresses that diversity means a lot more than gender.

“Diversity means diversity of thought, diversity of experience and diversity of approach, irrespective of your gender,” he says.

The search for future-fit directors can take time.

In the case of Ms Louden, a digital native, it took two years.

“It had to be somebody a lot younger than me,” says Mr Mullen.

“It had to be somebody who achieved success in their own field. The third requirement – the most difficult – was that it had to be somebody who understood the realities of being at an ASX 20-listed company and all the governance that goes with that.”