Is it gumption or ignorance? ARB is Australia’s largest manufacturer and distributor of four-wheel drive accessories and it remains one of only six ASX200 companies without a single female on its board.
However unlike some of those outliers which have committed to change, ARB has no intention of budging.
Fairfax Media has reported on Tuesday that despite repeated attempts at communication from the Australian Council of Superannuation Investors (ACSI) on this subject, ARB is sticking with ‘merit’ when it comes to board appointments.
Meet the male company directors getting voted against for no women on their boards https://t.co/13wTmwWG2P @smh @theage @businessday @AcsiEsg @Louisedavidson @ARB4x4 @TPG_Telecom #genderequity #genderdiversity
— Nassim Khadem (@NassimKhadem) November 20, 2017
Diversity is not an area the board wants to adopt a policy or set measurable objectives, rather it is committed to “generating long term shareholder value in an ethical manner”.
When pressed about shareholder concerns, ARB told ACSI that they do not discriminate on the basis of gender, age, ethnicity or cultural background and instead focus on merit.
ACSI CEO Louise Davidson told Fairfax Media that it’s hard to grasp that no meritorious woman has been found in the 28 years the company has been listed.
Quite extraordinary to consider isn’t it? Would that sort of track history, where your version of ‘merit’ has only produced candidates from one gender, not suggest that, possibly, the ‘merit’ you are relying on might not be completely objective?
A report prepared by the 30% Club earlier this year, using data from PwC and the AICD, shows very clearly there is no shortage of skilled women in Australia, proving the argument that there are no suitable women is baseless.
Yes, eliminating zero women boards is only part of the job. In 2018, we'll publish a revised gender diversity voting policy with new incentives for companies to meet the 30% target
— ACSI (@AcsiEsg) November 20, 2017
If an inquiring mind can consider that and still conclude that merit is objective, it hardly inspires confidence that the mind is fit enough to run a listed company.
ACSI used a large proxy vote against ARB director Andrew Stott earlier this year, consistent with the approach it announced earlier this year it would take to companies without women on their boards. It has voted against directors in only four instances and has been successful in securing progress towards gender parity in other companies.
Given the conclusive empirical evidence that indicates the economic benefits of diversity it is curious that more companies haven’t embraced it as a commercial priority.
Listed companies are run for the purpose of boosting the bottom line for the benefit of shareholders so eschewing an objective that is proven to do that amounts to an abrogation of that objective.
In Australia companies with the largest market capitalisations have the highest proportion of female board members which isn’t a coincidence.
Given the business case hasn’t been compelling enough for many chairs, directors and CEOs to achieve greater gender diversity in their organisations, perhaps it will be shareholders who can force it. In numbers they have the ability to accelerate the pace of change and ACSI has shown it isn’t afraid to use it.