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

3 ways to fix Australia’s affordability crisis

Our cost-of-living pressures go beyond the RBA: surging house prices, excessive migration, and expanding government programs, including the NDIS, are fuelling inflation, demanding bold, structural solutions.

Making sense of record high markets as the world catches fire

The post-World War Two economic system is unravelling, leading to huge shifts in currency, bond and commodity markets, yet stocks seem oblivious to the chaos. This looks to history as a guide for what’s next.

Is there a better way to reform the CGT discount?

The capital gains tax discount is under review, but debate should go beyond its size. Its original purpose, design flaws and distortions suggest Australia could adopt a better, more targeted approach.

How cutting the CGT discount could help rebalance housing market

A more rational taxation system that supports home ownership but discourages asset speculation could provide greater financial support to first home buyers.

Welcome to Firstlinks Edition 648 with weekend update

This is my last edition as Editor of Firstlinks. I’m moving onto a new role though the newsletter will remain in good hands until my permanent replacement is found.

  • 5 February 2026

It’s economic reality, not fear-based momentum, driving gold higher

Most commentary on gold's recent record highs focus on it being the product of fear or speculative momentum. That's ignoring the deeper structural drivers at play. 

Latest Updates

Superannuation

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.

Investment strategies

Corporate earnings show resilience against volatility but risks remain

Evidence for a strong reporting season had been piling up for months and validated an upgrade cycle already underway. However, risks remain from policy uncertainty.

Superannuation

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. 

SMSF strategies

Sixteen steps in a typical SMSF borrowing

Getting a mortgage is never an easy process but when an investment property is purchased in a SMSF the complexity increases significantly. Read this before taking the plunge. 

Planning

Do HNWI get better advice?

Good advisers lead to more diversification, lower turnover and less home bias. However, studies show the average adviser may not be adding much value to clients. 

Strategy

AFL Final Ten with wildcard edit 'unlevels' the field

When the new AFL season kicks off a wild-card will be added to the finals. Is this new formula fair and how does it impact the odds of winning the premiership.

Planning

Love them or hate them, it's worth understanding annuities

Investors have historically balked at exchanging a lump sum for a future steam of income. Breaking down the financial and emotional considerations of purchasing an annuity.        

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.