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

Division 296: the initial moves to make before the windows close

What if the best superannuation strategy isn't about earning more, but acting before your options disappear? Several overlooked planning windows are narrowing, with consequences that can last for decades.

The retirement scorecard: how many of these questions can you answer?

From the maths of retirement, estimating spending and picking the right asset allocation to survive a poor decade, here are the questions every retiree – current or future – should be able to answer for themselves.

Testamentary trusts: Treasury has picked the wrong reading

A decades-old estate planning tool has survived one tax crackdown only to be caught by another. The surprise isn't who the reform is targeting, but who could end up paying the price for drafting choices made years ago.

Superannuation’s structural failings

Politicians are fighting over access to super, but they may be arguing about the wrong thing. The system’s three fundamental flaws have been hiding in plain sight for decades, costing Australians far more than they realise.

Avoid unnecessary CGT with this estate planning clause

A simple estate plan can create a ticking time bomb. One overlooked clause can pit spouses against children, delay inheritances, and potentially leave a family facing an unexpected tax bill worth hundreds of thousands of dollars.

Higher yields are creating opportunities in global bonds

Bond markets are adjusting to a new reality, but not in the ways investors expect. With markets repricing and capital competing for attention, investors may need to rethink where resilience and opportunity lie. 

Latest Updates

Retirement

The retirement account that Australia should have

Our retirement system asks one account to do two very different jobs. A dedicated "rainy day" account separating income from emergency savings could deliver better outcomes and greater peace of mind for retirees.

Investing

What the US midterm results mean for investors

Democrats have regained control of Congress, changing the equation in Washington. Whether that proves positive for investors will depend less on the result itself and more on what happens next for growth and markets.

Taxation

Should the capital gains tax reward risk?

A reader query on the recent CGT reforms has revealed a bigger issue. One overlooked feature of the old system may have done more than compensate for inflation. As we move to indexation, are we forgetting to reward risk?

Investment strategies

Bonds: The income and diversification trade-off

Rising yields have made bonds attractive again, but that does not mean they will behave as expected. As inflation, fiscal pressures and geopolitical risks reshape markets, the role of bonds may be more complicated than it appears.

Investment strategies

Why high-dividend investing deserves another look

Income investors have endured several lean years, but signs of a recovery are emerging. As opportunities improve, investors face an important choice between chasing headline yields and building a reliable source of income.

Investment strategies

Why 'overvalued' has been such an expensive word

Investors love simple rules, especially when markets appear stretched. Yet some of the strongest returns have arrived when the outlook seemed least attractive. This leaves an important question that history struggles to answer.

Investment strategies

AI – A good kind of bubble or just a bubble?

Investor obsession with AI is attracting unprecedented amounts of capital and confidence. But beneath the excitement lies uncertainties about returns, funding and risks that enthusiasts may not be paying enough attention to.

Sponsors

Alliances

  • ASA-Logo-RGB-ActiveGreen-web.png

© 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.