In recognition of the problem that women are poorly represented
on boards and in senior management positions, the ASX has followed
the lead of other major stock exchanges around the world and
introduced guidelines designed to increase diversity in Australian
The ASX Corporate Governance Principles and Recommendations
(Recommendations) now include requirements for
listed companies to deal with a host of diversity measures.
The Recommendations place the issue of gender diversity squarely
in the board's domain. The emphasis of the Recommendations
is on disclosure on an 'if not, why not?' basis. As a
result, there will be much greater transparency of a
company's performance on gender diversity.
The proposed changes will take effect from 1 January 2011.
However, the ASX recommends transitioning to commence as soon as
possible to ensure companies have the required measures in place by
1 January 2011.
The Recommendations require:
Board member and selection: Boards will have
to demonstrate greater transparency in selection and the steps they
have taken to ensure a diversity of candidates
Diversity policy: Companies must adopt and
disclose a diversity policy which includes requirements for a board
to establish measurable objectives for achieving gender
Diversity procedures: Companies must ensure
the diversity policy is implemented and internally reviewed and
Assessment of diversity: Companies must assess
compliance with the diversity policy on an annual basis and publish
this assessment in the annual report
Pay equity: The Remuneration Committee must
consider and review remuneration across the company on the basis of
gender. This must be the subject of regular review and reporting to
Disclosure of diversity data: Companies must
disclose in the annual report the following:
measurable objectives for achieving gender diversity
the proportion of women employees in the whole
women in senior executive positions and women on the
Listed entities need to be considering this issue now. The
development of a diversity policy will take some time and
consultation. Other steps that should be taken include:
Consider whether to make an early transition to the
Recommendations and include the disclosure in the annual report for
2010/11. If a company chooses not to comply with the
Recommendations in full, they will be required to outline the
reasons why in their annual report
Develop a diversity policy. This needs to include requirements
for the board to establish measurable objectives for achieving
gender diversity and should be included in the corporate governance
statement on the company's website
Establish measurable gender objectives
Develop an internal review mechanism to assess the
effectiveness of the diversity policy
Review and assess procedures for analyzing female workforce
Prepare for disclosure in the annual report
Review and assess board renewal, induction, education and
For information on the implications for your business and the
assistance we can give in development of policies and compliance
with the Recommendations, please contact a member of our Workplace
Relations & Safety Group.
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
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