A new report by accounting firm KPMG has found that companies with females on their boards have achieved higher revenue growth, profits and shareholder returns.
Report co-author Sarah Cain said diversity was a key finding in her search for the secrets of success behind Australia’s ASX 300+ companies.
She concluded that female chief executives in the ASX 300+ delivered a nine per cent increase in revenue in 2016, compared to a group-wide average of 0.5 per cent.
But while the financial benefits of gender diversity in the group was clear, the report also found that only 21 companies in the ASX 300+ had female chief executives, or three percent, and 65 per cent didn’t have a single female on their boards.
Ms Cain said although the Australian Institute of Company Directors had previously called for 30 per cent of female representation on boards by the end of 2018, the ASX 300+ boards comprised just nine per cent of female directors compared to 23 per cent in the ASX 200.
Asked if the target of 30 per cent was realistic, Ms Cain said: “Nine per cent is very low and while not all that surprising, it is slowly changing but may not be achievable in that timeframe.
“It may take a number of years to get from nine to 30.”
Ms Cain said investment in digital technology, acquisitions and the composition of shareholders had also driven success, she said.
“What was also interesting was that 49 companies were dominantly held by one shareholder which means they are acting more like private or family businesses and perform better than their competitors.”
The Secrets to Success of the ASX 300+ report also found that companies that invested in tangible assets like digital technology grew their revenue at a faster rate than those that did not, and that 15 per cent of the companies analysed showed some financial distress.
Ms Cain said the report - a comprehensive analysis of small to medium enterprises which represents 65 per cent of the Australian economy, was the first of its kind.
She said she would share the secrets of success with private and family businesses across Western Sydney with the aim of improving their practices and increasing profits.
