Australia's largest pension fund is doubling down on its campaign for more women on boards.
With almost all of the top 200 listed companies now having at least one female director, AustralianSuper is raising the bar and pushing for at least two women board members, said Andrew Gray, director of ESG and stewardship at the Melbourne-based fund.
That puts more than a quarter of companies in the benchmark S&P/ASX 200 Index in the A$154 billion ($108 billion) fund's sights. It has given them until their annual meetings in October-November to show progress, or it will start voting against directors up for re-election, Mr. Gray said in an interview.
"Better gender-diverse boards will have greater diversity of thought," which is vital for long-term returns, Mr. Gray said.
AustralianSuper's move supports the Australian Council of Superannuation Investors' recent drive to pressure Australia's largest listed companies to improve board diversity. The group, which represents funds holding more than A$2.2 trillion in assets, has asked members to vote against either the chairman, chair or member of the nominations committee or the longest-serving director seeking re-election, at companies with poor gender diversity.
Women accounted for 29.5% of directors at the top 200 companies last quarter, just short of The 30% Club's eponymous target. Still, the number of women on boards has increased 10 percentage points since 2015 as the number of companies without female directors fell to four from 30, according to the Australian Institute of Company Directors.
In addition to voting against long-serving directors on male-dominated boards, ACSI wants regulators to force change if companies don't achieve gender-balanced boards in five years, according to a report released Monday.
"This is the logical next step in supporting diversity on boards," Louise Davidson, ACSI's chief executive officer said in a statement. "If companies are not willing to set and achieve a target for gender balance within a reasonable time frame, then there is a role for further regulation."
Companies that support disclosure and best-in-class gender equality practices have gained 16% this year, as measured by the Bloomberg Gender-Equality Index, outperforming Australia's benchmark index and the MSCI World Index.
More than a quarter of companies in the S&P/ASX 200 Index fall foul of AustralianSuper's and ACSI's new target of at least two women directors, including Cimic Group and Magellan Financial Group, according to AICD data. Four companies, including TPG Telecom, have no female directors, the data show.
"We want better gender diversity on boards," Mr. Gray said. "If it happens sooner, we'd be happy."