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

Want your loved ones to inherit your super? You can’t afford to skip this one step

One in five Australians die before retirement and most have not set up their super properly so their loved ones can benefit from all their hard work and savings. 

Super is catching up, but ageing is a triple-threat

An ageing Australia is shifting the superannuation system’s focus from accumulation to the lifecycle of retirement. While these pressures have been anticipated for decades, they are now converging at scale and driving widespread industry change.

Has Australia wasted the last 30 years?

The 20 years after Peter Costello left Treasury have been deemed wasted...by Peter Costello. The missed opportunities for Australia began long before.  

The 5% deposit scheme is bad for homeowners and Australia

An ‘affordability’ scheme making the county more vulnerable to economic shocks and contributing to the deteriorating financial situation of everyday Australians.

3 ways to defuse intergenerational anger

With the upcoming budget increasingly likely to include bold proposals to alter the tax code I’ve outlined three incremental steps with fewer unintended consequences.

Navigating the next stage of life in retirement

Retirement planning is more than just saving enough money. Long-term care needs, housing choices, and social networks are just as critical for a happy and enjoyable life.

Latest Updates

Superannuation

Indexation implications – key changes to 2026/27 super thresholds

Stay on top of the latest changes to superannuation rates and thresholds for 2026, including increases to transfer balance cap, concessional contributions cap, and non-concessional contributions cap.

Economy

Central banks need higher inflation targets

In a shift away from solely targeting low inflation, central banks are considering raising inflation targets to combat economic challenges, but face potential drawbacks and conflicts in policy implementation.

Exchange traded products

The missing 30%: how LIC returns are understated, and why it matters

The perceived underperformance of LICs compared to ETFs is due to existing comparison data excluding crucial information, highlighting the need for proper assessment and transparent reporting.

Latest from Morningstar

Alpha isn’t dead. You’ve just been measuring it wrong

New research shows smarter portfolio construction—not new factors—is the real edge in the hunt for alpha. However, finding it requires a fundamentally different mindset.

Investment strategies

The diversification illusion: why 'balanced' portfolios may be exposed

Many 'diversified' portfolios are increasingly driven by the same narrow set of forces. As concentration builds beneath the surface, understanding how portfolios behave - not just how they’re constructed - is critical for investors.

Investment strategies

The case for staying the course in credit

Current market volatility is likened to Lenin's quote on rapid change. Rising oil prices and interest rates impact bond and corporate yields, with a potential economic downturn ahead. Maintaining interest rate duration is advised.

Investment strategies

One risk after another

Investors often focus on front-of-mind risks, reacting to each headline event without considering long-term impacts. Cass Sunstein and Timur Kuran define this as an "availability cascade," affecting financial decision-making.

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.