As the United States rolls back key DEI policies under the Trump administration, the ripple effects are being felt globally. While the Australian legal and cultural frameworks remain more supportive of diversity, the shift in global sentiment is prompting many boards to reassess how they define and pursue inclusion.
In Australia, board diversity has traditionally focused on gender representation. But in today’s complex business environment, that’s no longer enough. True board diversity includes a broader spectrum: cultural background, age, disability, LGBTQ+ identity, socio-economic experience and cognitive diversity. These dimensions shape how boards think, govern and respond to risk, and they’re essential for building resilient, future-ready organisations.
This article explores the current state of diversity in Australian boards and why senior leaders must expand their view beyond gender.
Social diversity
Social diversity includes demographic traits such as gender, ethnicity and age. These differences contribute to unique worldviews that can influence more comprehensive, considerate and wise decisions for the company.
Gender diversity on Australian boards
In Australia, gender diversity on boards has received the most attention over the last couple of decades, which is reflected in the progress made. The 2025 Board Diversity Index found that 37% of ASX 300 board members were women, with raw numbers nearly doubling in the last decade from 399 seats in 2016 to 781 in 2025. 73% of boards had at least 30% female members and 57% had half or more. Interestingly, higher ranked companies in the ASX had more female representation, with the ASX 50 having 42.2% female directors compared to the ASX 201-300 with 33.9%.
Ethnic and cultural representation
While gender diversity has seen notable progress, other dimensions – such as ethnicity – remain underrepresented, despite varied cultural intelligence being increasingly valuable in the globalised business landscape. The number of ASX 300 directors from non-European backgrounds remains low at 5.9% in 2025, compared to 91.9% from Anglo-Celtic backgrounds. Just five Indigenous Australians hold seven board seats in the ASX 300.
Age diversity and generational insight
Generational diversity is another factor that influences board dynamics and adaptability. While age does typically bring experience and wisdom, younger board members can play a critical role in the current phase of technological and digital revolution. In most Australian companies, board members are older, averaging 62 years for men and 59 for women. The majority (80.5%) of directors are aged between 50 and 70 years, with just 7.2% who are younger and 12.2% who are older.
Cognitive diversity: Thinking beyond demographics
Alongside social diversity, cognitive diversity – the differences in how individuals think, solve problems and approach challenges – is emerging as a key factor in board effectiveness. In boardrooms, this type of diversity enables richer discussions, broader risk assessment and more innovative decision-making.
While it’s often assumed that increased social diversity will automatically lead to new viewpoints and perspectives, this isn’t necessarily the case. New board members may have similar backgrounds and life experiences to incumbent directors or be chosen because they fit in well with the existing team. When looking to enhance the diversity of a board, the best outcomes are achieved when demographic traits are considered alongside an individual’s professional background, skills, problem-solving capabilities and processing styles.
Why is diversity so important today?
In today’s environment, board diversity is not just a social goal – it’s a strategic imperative. Boards need the optimal combination of skills, expertise and perspectives to lead effectively, and research shows that diverse boards outperform their peers across multiple dimensions:
- Companies in the top quartile for board gender diversity are 27% more likely to financially outperform bottom quartile companies.
- Companies in the top quartile for ethnically diverse boards are 13% more likely to financially outperform bottom quartile companies.
- Cognitive diversity has been linked to faster problem-solving, better decision-making, reduced groupthink and better stakeholder engagement on boards.
- Greater diversity in boards and executive teams correlates to more diversity across the workforce.
- Diversity is linked to higher impact scores across a company’s social and environmental goals.
If board diversity is simply a checkbox, however, then it may not translate into meaningful impact. Without an inclusive culture and intentional facilitation, diverse perspectives may be overlooked or silenced. In contrast, boards that embrace open dialogue and high engagement from all directors are better equipped to leverage diversity for stronger decision-making, innovation and governance outcomes.
As board agendas grow more complex and stakeholder expectations rise, diversity must be more than a metric – it must be embedded in how boards think, operate, and lead. The question isn’t whether diversity matters, but whether your board is equipped to harness it.
