Corporate watchdog wants Australian boards to do better

The corporate watchdog has pleaded with Australian businesses to take a step back and think about the make-up of their boards, as a respected director warned against limiting diversity initiatives to solely achieving gender equality.

Australian Securities and Investments Commission chair Joe Longo has lamented the lack of directors on company boards with the right skills and experience to deal with some of the most challenging threats facing the country, including cybersecurity and artificial intelligence.

ASIC chair Joe Longo wants more science in the board room.Credit: Alex Ellinghausen

“There’s a lot of talk these days about diversity – and one element of this needs to be a healthy diversity of experience and training,” Longo will tell an Australian Institute of Company Directors summit on Wednesday.

“I know we can’t all be scientists – and if we were, we’d have the same problem of not enough diversity of experience. Nor is science in the boardroom a panacea that assumes responsibility from the rest of the board. But there is a real opportunity to broaden the skill sets and the perspectives of company boards – both by strategic hiring and by upskilling current board members in areas such as science and technology.”

Longo’s comments come just a day after serial chairman John Mullen warned against a wholesale rollback of diversity, equity and inclusion policies in the wake of Donald Trump’s election to the White House.

The chairman of Qantas, Brambles and Treasury Wine Estates told the summit on Tuesday the narrow focus on improving diversity through gender parity was “missing the point”, and that achieving greater diversity should not be viewed as a box-ticking exercise.

Don’t be radically woke or anti-woke, Qantas chair John Mullen says. Credit: Michael Quelch

“These days, the old girls club is just as active as the old boys club and so many ASX directors come from the same background, irrespective of whether they are male or female,” Mullen said. “To me, diversity means somebody coming from a totally different background with different values, different experiences and different beliefs.”

Mullen said while some in corporate Australia had overstepped the mark by “enthusiastically” adopting some of the “more radical or woke initiatives”, mainstream DEI initiatives improved the performance of businesses.

“Don’t be radically woke, but don’t be radically anti-woke either,” he said.

In his speech, Longo will call out the lack of directors with a background in technology on company boards. He will say the average number of board members with an accounting, banking or finance background had climbed to 40 per cent last year, while the combined total of those with a background in law, finance and general management is 70 per cent.

In contrast, only 7 per cent of board directors have a background in technology.

“Greater diversity in board member skills and thinking, ensures that directors can understand and engage with the risks facing their businesses, and bring their skills and experience to address these risks,” the chair will say.

In his speech, Longo did not go into specific examples but called out the relationships between directors and senior management being at the heart of “several well-publicised issues in recent times”.

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