• Blog Topics

  • Enter your email address to follow the CompliSpace blog and receive email notifications of new posts.

    Join 2,973 other followers

  • Twitter Feed

  • Archives

Tips on Drafting a Diversity Policy That Complies with the ASX Governance Principles


The amendments to the ASX Corporate Governance Principles & Recommendations (ASX CGPRs), published in June 2010, require all ASX listed entities to either establish a policy concerning diversity or,  if no such policy is adopted, explain in their annual report why they have not adopted such a policy.

The changes take effect for the first financial year of a listed entity beginning on or after 1 January 2011. Early transition is encouraged.

Summary of the new diversity obligations

The ASX CGPRs require ASX listed entities to:

  • (Recommendation 3.2) Establish a diversity policy that includes a requirement that the board of directors;
    • establish measurable objectives for achieving greater gender diversity; and
    • assess annually both the measurable objectives for achieving gender diversity and the progress in achieving them.
  • (Recommendations 3.2, 3.5) Disclose the policy, or a summary of the policy, on the entity’s public website in a clearly marked corporate governance section;
  • (Recommendation 3.3) Disclose the measurable objectives for achieving gender diversity set by the board and progress towards achieving them in the entity’s annual report;
  • (Recommendation 3.4) Disclose in the entity’s annual report the proportion of women employees in the whole organisation, women in senior executive positions and women on the board.
  • (Recommendation 2.6) Provide in the entity’s annual report, a statement as to the mix of skills and diversity which the board of directors is looking to achieve in membership of the board.

Designing a Diversity Policy

The key thing to understand when drafting a Diversity Policy is that it does not stand alone, but rather it integrates with the existing policies and procedures of an organisation by:

  • pulling together all the things that an organisation is doing to promote diversity (some examples are provided below);
  • creating processes through which diversity is embedded within the culture of an organisation (e.g. training programs, a code of conduct, performance review programs etc); and
  • ensuring transparency of process and clear reporting outcomes.

Measures Designed to Promote Diversity

Most organisations, will have already implemented many policies and procedures that are designed to promote diversity in their workplace.  Examples of such initiatives include:

  • Equal Employment Opportunity (EEO) policies dealing with discrimination and harassment;
  • Recruitment and Selection Procedures which specify processes that are designed to attract appropriate candidates;
  • Internal Grievance Procedures designed to manage conflicts in the workplace as well as issues of misconduct;
  • A Workplace Safety Program designed to prevent bullying in the workplace;
  • Policies to provide flexible work practices, such as flexible working arrangements for parents of pre-school children which are now contained in the National Employment Standards;
  • Internal training initiatives;
  • A company values statement which articulates certain standards of behaviour consistent with encouraging diversity;
  • A code of conduct; and
  • Establishment of  mentoring arrangements.

Companies with more than 100 staff are, of course, required by law in Australia to implement an affirmative action program for women in the workplace (Equal Opportunity for Women in the Workplace Act 1999).

Setting Measurable Objectives For Achieving Gender Diversity

The setting of measurable objectives, and reporting on the progress that has been made towards achieving these objectives, are specified as basic requirements of a diversity policy.  An ASX listed entity cannot comply with the new ASX CGPRs without meeting these requirements.

One tip for establishing measurable objectives is not to limit these objectives to pure gender targets (e.g. number of women in the workplace) but to include other measurable objectives such as progress that has made in establishing policies and procedures that are designed to promote diversity.

Useful Resources Relating to Diversity

The ASX has established a web page dedicated to providing up-to-date resources and research for ASX listed entities related to diversity. Click here to access this information.

How can CompliSpace help?

CompliSpace combines specialist governance, risk and compliance consulting services with practical, technology-enabled solutions.

We provide our clients with comprehensive programs covering areas such as enterprise risk management, human resources, workplace safety and ASX governance policies.  We have released our ASX Diversity Policy which is available to our subscribers.

CompliSpace content is delivered on-line, in a format that allows clients to quickly and efficiently tailor the content to their own particular specifications.

Our clients include a wide range of ASX listed entities and Australian Financial Services licensees.

If you are looking to streamline your existing governance, risk or compliance programs and make them more relevant to your organisation, give us a call.

We are committed to helping organisations to implement sustainable governance solutions. Further resources and information are available for ASX listed entities at www.complispace.com.au/ASXListedEntitiesResourceCentre.

Contact Details

P: +61 (2) 9299 6105 (Sydney) / +61 (8) 9288 1826 (Perth)

E:  contactus@complispace.com.au

W: www.complispace.com.au

This blog is a guide to keep readers updated with the latest information. It is not intended as legal advice or as advice that should be relied on by readers. The information contained in this blog may have been updated since its posting, or it may not apply in all circumstances. If you require specific or legal advice, please contact us on (02) 9299 6105 and we will be happy to assist.

3 Responses

  1. Suggest policies should be drafted having regard to Director Corps Act obligations to act in the best interests of the company. This means the best candidates for the exec position or board position and should override someones desire for diversity.
    40% of listed coys are mining coys, many very small. The chance of any meaningful gender diversity in that sector in the next 10 years is fantasy. In a recent case (non-mining) we advertised for a CEO – 40 applicants, incl 5 females, top female ranked 15th. This is common – surely no one is suggesting that the 15th ranking person should be given the job!! Probably numerous dsicrimination cases would commence from top 6!. The problem in the vast majority of appontments is not in poor selection against women, but is the result of a lack of training, qualification, experience, etc. in the female applicants. ASX stuff is written as if the whole issue is discrimination in the selection process. Rubbish! Speak to people in the mining sector and they will say that they get very few women applying for jobs. We had no women wanting to live on boats or huts off/in Angola for 3 weeks in mining services. Hopefully there will be more in depth consideration of this matter rather than the shallow hype that is out there. The issue needs to be addressed at the middle management level and making more industries attractive to women (which is difficult in some cases). It is interesting that Spain has one of the worst economies in Europe, one of the highest levels of unemployment (20%) but has the highest proportion of women on boards (55%). But ASX like to quote a small study in US that showed that one group of companies with more women on the board performed better than another group of companies that had less women on the board. I wonder if those better performing boards put there better performance down to the extra woman on the board. Many women I speak to are unimpressed with this effective quota system – they want to achieve through their own efforts not so that quotas are achieved. I have been fortunate to have worked with several highly regarded and effective women directors who contributed significantly to the governace process. Let us hope that we can look to the future to achieving gender diversity through individual achievement rather than quotas and poor governance decisions that will likely negatively impact our companies (putting people in positions where they cannot deliver nor grow into) and likely put back the genuine cause many years.

    • Ian,

      Obviously many ASX listed entities operate with very few staff and therefore gender diversity quotas are not appropriate. Having gone into this in alot of detail I think that the message is that companies can adopt a diversity policy and measurable objectives which do not necessarily need to relate back to quotas. It is a complex area covering inter-related disciplines of corporate governance and human resources management. It requires some thought to ensure that appropriate measures are taken, consistent with the size, nature and complexity of a company’s operations, rather than mindless appointments for the sake of achieving a quota. FYI the ASX has published a paper by Freehills which deals with the possible dangers of reverse discrimination. This is linked on the blog.

      James

  2. My personal view is that this attempt by ASX, a private company itself, smacks of meddling with the realities of our society and is another reason why the market for services to listed companies should be opened to competition. The participation rate by women in company boards is determined by boards making decisions in the interests of their companies. It is a big call for ASX to suggest that it is entitled to create an affirmative action program in respect of those appointments.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

Follow

Get every new post delivered to your Inbox.

Join 2,973 other followers

%d bloggers like this: