The impact of soft law on social change: Measurable objectives for achieving gender diversity on board of directors

In 2010 the Australian Securities Exchange's Principles of Corporate Governance were amended to include three new recommendations dealing with gender diversity in listed corporations. The recommendations suggest that companies implement a diversity policy, set measurable objectives for achieving gender diversity and measure the number of women at various levels of the organisation. This article examines companies early response to the amendments. It presents an empirical analysis of the disclosures made by ASX 200 companies in their 2011 annual reports. The article builds on and develops research carried out by the authors for the 2012 Australian Census of Women in Leadership which found that, although the number of women on corporate boards had increased since 2010, there was not a similar increase in women in senior executive teams. It presents evidence that there are positive changes being implemented in the majority of ASX 200 companies that should, over time, make a difference to the ability of women to reach positions of leadership. The Australian approach of encouraging change through organisation-wide policy improvements and targets will hopefully improve female representation along the length of the pipeline to leadership and not only at the top. The ASX policy was formulated in the context of an international debate regarding the relative benefits of quotas and targets in achieving gender diversity on boards. In major European countries mandatory quotas were adopted, while in Australia and other countries voluntary targets set. Quotas secure substantial change through compliance, while targets may encourage change through strategic initiatives. This research examines early evidence of the impact of both hard and soft law on social chang