Australia: board diversity in public limited companies - CAMAC report published

The Australian Government's Corporations and Markets Advisory Committee has released its report concerning board diversity in public limited companies (the report is dated March 2009 but has only recently been available on the CAMAC website). The report provides a brief overview of the legal framework governing boards and has an interesting, albeit short, chapter exploring what makes an effective board.

With regard to diversity, the Committee advises against the introduction of quotas for private sector companies, stating that this would run counter to the principle that board composition is the ultimate responsibility of the shareholders. The Committee notes, however, that there is scope for government and business leaders to encourage companies to take a more open approach to board selection. In this regard, the Committee recommends some changes to the commentary in the ASX Corporate Governance Council Principles and Recommendations in order remind nomination committees of the desirability of considering board diversity.