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.
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