Companies committed to 40:40 Vision see benefits of gender diversity in leadership

17 January 2024

Three years after its launch, 40:40 Vision has released its inaugural progress report. 

The report reveals companies that are signatories to 40:40 Vision are advancing towards gender balance quicker than the overall ASX and see the benefits of gender diversity in driving their success.

Launched in October 2020, 40:40 Vision is supported by industry partners representing more than $6 trillion in AUM and aims to achieve gender balance in Executive Leadership Teams (ELTs) across all ASX300 companies by 2030. The term 40:40 stands for 40 per cent identifying as women, 40 per cent identifying as men, and 20 per cent identifying as any gender. The report's timing aligns with the first interim target timeframe for many early adopters of 40:40 Vision.

Chair of 40:40 Vision and HESTA CEO Debby Blakey said target setting had proven to be an effective tool in advancing gender diversity with companies focused on professional development, recruitment, and succession planning.

"Gender diversity improves talent attraction, company culture, skillsets, team performance, and reputation," Ms Blakey said.

"The results of a signatory survey show that 51 per cent of signatory companies have already achieved gender balance in their ELTs compared to just 23 per cent of the ASX300. 

"It was also pleasing to see that of the 25 signatory companies who participated in the survey, more than 80 per cent have set interim gender targets for their ELTs, with most already achieving their interim goals.” 

According to 100 per cent of survey respondents, diversity improves talent attraction, retention, and company culture.  More than 90 per cent said diversity delivered skillsets for future strategic needs, team performance, business results, and company reputation. It challenges the status quo and fosters innovation while enhancing risk management.

However, there remains a need for greater transparency and consistency in reporting, as 25 per cent of survey respondents still need to include their 40:40 Vision targets in annual or sustainability reports. 

Regarding strategies to improve gender diversity, Ms Blakey said most companies engage in professional development programs, bias-challenging recruitment, and succession planning. 

Despite this progress, women remain significantly underrepresented in ELTs across the ASX300. The 2023 Chief Executive Women Census found a small increase in the overall representation of women in ASX300 ELT roles from 27 per cent in 2022 to 29 per cent in 2023[1].

Despite strong evidence showing the effectiveness of target setting to drive progress, approximately 36 per cent of all ASX300 companies are yet to set gender composition targets, which creates an opportunity for corporate Australia to do more. 

The benefits of improved gender diversity in executive leadership are profound. Extensive research shows that organisations benefit from diversity in various ways: Diversity of thought, improved decision-making, innovation, and ultimately, better harnessing the performance benefits of diversity for investors[2].

The 40:40 Vision 2023 Progress Report calls on all ASX300 companies to set 40:40:20 gender composition targets for their ELTs, increase ambition if existing targets are below 40 per cent of women, allocate resources for diverse talent pipelines, embed accountability for change into leader performance assessments, and seek collaboration opportunities to address shared workforce challenges.

Ms Blakey acknowledged that transformational change was not easy, and companies are anticipating challenges, including smaller female talent pools in traditionally male-dominated industries. However, she believed that also created opportunities.

"We encourage companies to seek appropriate collaboration opportunities such as through industry bodies or diversity experts," Ms Blakey said.

For investors, the report encourages greater integration of 40:40 Vision principles into their engagement with portfolio companies, monitoring portfolio company performance against 40:40 by 2030 and considering engagement escalations and other measures to drive progress. 

HESTA has recently strengthened its voting policy to include votes against select Director elections at ASX300 companies where the board has less than 30 per cent female representation and against chairs of companies employing single-gender executive teams. This decision was made due to the evidence linking strong performance across a range of metrics by gender-diverse companies, which, for long-term investors like HESTA, also supports strong member outcomes. 

To view the report visit https://www.hesta.com.au/4040vision

Ends.

About 40:40 Vision

Among the 37 signatories are many household names, including Westpac, BHP, IGO, Mirvac, Ramsay Health, South32 and Webjet company signatories have a combined value of around $582b representing around 25 per cent of ASX 300 total market capitalisation. 25 companies participated in this survey.