Gonski calls for board diversity

DAVID Gonski has used his first public appearance since becoming the chairman of Australia's most powerful investment fund to call for greater openness in corporate culture and a greater diversity of board appointments in Australian-listed companies.

By InvestSMART · 15 Mar 2012

By InvestSMART ·
15 Mar 2012

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Speaking at an Australian Institute of Company Directors lunch in Perth yesterday, the incoming chairman of the $73 billion Future Fund called on businesses to appoint more women to their boards.

Mr Gonski criticised Australian corporate culture for being too narrowly focused, saying too many people treated board appointments as a retirement plan, rather than as a profession.

"We need to broaden the base of the people on boards. We obviously need to draw from 100 per cent of the population I don't know how we men got away with it for so long. To draw from 49 per cent of the population cannot possibly be as good as choosing the best from the whole 100 per cent," he said.

His comments came as the Australian Securities Exchange board yesterday began preparations to search for a new chairman.

In taking on the Future Fund role, Mr Gonski will stand down as ASX chairman at the end of June.

While the markets operator will look outside its own pool of directors, former Sydney Futures Exchange chairman and current ASX director Rick Holliday-Smith has already emerged as a potential successor.

Mr Holliday-Smith has headed up various capital markets businesses and is currently chairman of the state and federal government-owned utility Snowy Hydro and listed healthcare specialist Cochlear.

Mr Gonski will remain chairman of the Australian arm of investment bank Investec as well as Coca-Cola Amatil. He is also a director of Singapore Airlines, although that role is due to end in July. The early exit of the well-connected Mr Gonski is a setback for the ASX, which needs to maintain good links with Canberra in the face of new rivals such as Chi-X Australia.

Separately, the country's biggest online stockbroker, CommSec, this week told clients it was now linked to the Chi-X trading platform. This means the broker will consider running orders over the rival exchange operator. With WEST AUSTRALIAN

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Frequently Asked Questions about this Article…

What did David Gonski say about board diversity and corporate culture?

David Gonski used his first public appearance as incoming Future Fund chairman to call for greater openness in corporate culture and more diversity in board appointments. He urged businesses to appoint more women and to ‘broaden the base’ of board members, saying companies should draw from 100% of the population rather than just part of it.

Why does board diversity matter for everyday investors?

Gonski argued that selecting directors from a wider pool improves board quality. For investors, greater board diversity can mean better decision-making and oversight, because boards that reflect more of the population are less likely to rely on a narrow set of views and experiences when setting strategy and managing risk.

What is the Future Fund and what role will David Gonski play?

The Future Fund is Australia’s sovereign wealth fund valued at about $73 billion. David Gonski is the incoming chairman of the Future Fund, and he has used the role to promote changes in corporate governance such as increased board diversity.

How will Gonski’s move affect the Australian Securities Exchange (ASX) chairmanship?

Gonski will stand down as ASX chairman at the end of June as he takes on the Future Fund role. The ASX board has begun preparations to search for a new chairman to replace him.

Who has emerged as a potential successor to David Gonski as ASX chairman?

Rick Holliday-Smith has been mentioned as a potential successor. He is an ASX director, a former Sydney Futures Exchange chairman, and currently chairs Snowy Hydro and listed healthcare specialist Cochlear.

Which company roles will David Gonski keep after joining the Future Fund?

According to the article, Gonski will remain chairman of the Australian arm of investment bank Investec and of Coca-Cola Amatil. He is also a director of Singapore Airlines, though that role is due to end in July.

What implications did the article suggest Gonski’s early exit has for the ASX?

The article described Gonski’s early exit as a setback for the ASX because the exchange needs to maintain strong links with Canberra while facing new rivals such as Chi-X Australia. Losing a well-connected chair could make that more challenging.

What’s the recent development between CommSec and Chi-X, and why does it matter to investors?

CommSec, Australia’s biggest online stockbroker, told clients it is now linked to the Chi-X trading platform. That means CommSec will consider routing orders over the rival exchange operator, which could affect where client orders are executed and increase competition between trading venues.