Register For Our Mailing List

Register to receive our free weekly newsletter including editorials.

Home / 357

Bigger companies have more females on their boards

Bigger companies are materially better than smaller companies at improving gender diversity on boards. The relationship is linear. The largest 10% of companies, ranked by market capitalisation, have on average 35% of board members being female while the smallest 10% barely reach 10%.

OpenDirector tracks 412 listed companies, analysing the composition and performance of boards. The database also includes the directors and executives of 64 superannuation funds and 30 large government entities.

The results showing declining female representation on smaller company boards is obvious in the chart below.

 

Difficulty assessing a link to performance

There are many likely reasons why larger companies are more active in promoting women to boards.

Smaller company boards are often close-knit, smaller in director numbers and comprising of the company’s executives, original founders and even family.

Fewer women on smaller company boards has a material effect on academic work which investigates whether female directors or boards with higher female representation improve company shareholder returns. It is much harder for large companies like CBA (55% female board representation) or CSL (44%) to double in size than smaller companies like AfterPay (14%) or Magellan (14%). While a more worthwhile topic is the overall board diversity, it is interesting how often the gender issue alone becomes a centre of debate.

OpenDirector analyses the performance of directors and, by default, has an aggregate index of how female directors compare to male directors. Our individual director analysis is theoretically robust in that we create total return indices for each company adjusted for company sector and size. At this stage, our preliminary data indicates that female directors do not outperform their male counterparts.

Our reluctance to publish detailed results is because bias still exists in this area. Female representation is higher in established companies than new entrepreneurial companies. If work is to be done on improving female representation on boards, a good place to start may well be increasing women on start-ups and private equity IPOs. This point is known to the experts.

Interestingly, female representation on boards is reasonably consistent across sectors. While representation is slightly lower in more ‘blokey’ industries like energy, industries and minerals, it is not glaringly so. Utilities appear to have low representation, but there are few companies in this sector.

Female representation on boards is increasing but still low. Of the 324 directors who were appointed in the last 12 months in our database, 118 or 36% were female. While increasing the average number of women on boards, these are not exceptional growth rates. As today’s CEOs become tomorrow’s directors, perhaps the more concerning statistics is that of the 34 new CEOs appointed to boards, only three were women.

 

Donald Hellyer is Director of OpenDirector and CEO of the development company BigFuture.

 

 

  •   11 May 2020
  • 2
  •      
  •   

RELATED ARTICLES

Why gender diversity matters for investors

Decoding the DNA of exceptional companies

Why investment stewardship matters for long-term investors

banner

Most viewed in recent weeks

2 billion reasons to fix retirement income

A proposal to address Australia's 'stranded balances' in retirement by requiring super funds to transition members to pension phase at 65, boosting retirement income and reframing super as a source of income.

The ultimate superannuation EOFY checklist 2026

Here is a checklist of 28 important issues you should address before June 30 to ensure your SMSF or other super fund is in order and that you are making the most of the strategies available.

Noel Whittaker’s take on the budget

Marketed as a fix for inequality and housing affordability, the latest budget instead delivers a tangle of tax changes that leave everyday Australians worse off.

Two months into retirement

A retirement researcher's take on retirement and her focus on each of her six resource buckets to stay engaged during the transition and beyond.

Welcome to Firstlinks Edition 662 with weekend update

The debate over the budget is increasingly shaped by frustration and perceptions of unfairness, rather than clear-eyed assessment of policy outcomes.

Australia has no death duties. Technically.

Australia may not levy formal death duties, but a growing web of tax measures is quietly shaping what wealth passes between generations. Now, the 2026 budget adds another layer.

Latest Updates

Investing

Markets without a margin for error

From US fiscal pressure to China’s shifting growth model and Australia’s structural constraints, markets are yet to reflect a less forgiving global investment landscape.

Investment strategies

The investment mistake killing your returns

Retail investors face an increasingly complex product environment, but simplicity may be the most overlooked advantage in building a portfolio you can actually live with.

The ticking clock on oil reserves

A sustained disruption through the Strait of Hormuz is forcing a rapid drawdown of global inventories. Without a resolution, the arithmetic points to a supply shock by early August and a sharp surge in the oil price.

Infrastructure

Managing the impact of the Middle East conflict on listed infrastructure

The outbreak of conflict in the Middle East in February 2026 marks an historic shock for oil and gas markets, with major implications for inflation, interest rates and ultimately for listed infrastructure companies.

Economy

Rent inflation and the missing policy

The government plans to remove negative gearing to help renters buy homes. For those who remain renters, the wrong levers are being pulled to try and increase rental unit supply.

Investment strategies

The Risk-Wealth Paradox: Why more money means you should take less risk

As wealth grows, so does the assumption that risk should too. But in reality, the opposite may be true: once you understand how the value of money changes over time, the case for taking less risk becomes far more compelling.

SMSF strategies

SMSF estate planning: Eight things to consider

As super balances grow, SMSFs are becoming central to retirement outcomes. Without proper planning for “Armageddon” scenarios, even well-structured funds can unravel when it matters most.

Sponsors

Alliances

© 2026 Morningstar, Inc. All rights reserved.

Disclaimer
The data, research and opinions provided here are for information purposes; are not an offer to buy or sell a security; and are not warranted to be correct, complete or accurate. Morningstar, its affiliates, and third-party content providers are not responsible for any investment decisions, damages or losses resulting from, or related to, the data and analyses or their use. To the extent any content is general advice, it has been prepared for clients of Morningstar Australasia Pty Ltd (ABN: 95 090 665 544, AFSL: 240892), without reference to your financial objectives, situation or needs. For more information refer to our Financial Services Guide. You should consider the advice in light of these matters and if applicable, the relevant Product Disclosure Statement before making any decision to invest. Past performance does not necessarily indicate a financial product’s future performance. To obtain advice tailored to your situation, contact a professional financial adviser. Articles are current as at date of publication.
This website contains information and opinions provided by third parties. Inclusion of this information does not necessarily represent Morningstar’s positions, strategies or opinions and should not be considered an endorsement by Morningstar.