OPINION: The expression ‘what gets measured gets done’ does not ring true when it comes to examining the latest diversity report from executive and board recruitment firm Watermark.

Measured year after year, cultural diversity has not budged. In fact, it has gone backwards.

In its 2026 Board Diversity Index, Watermark makes this clear.

“The number of directors from non-Anglo Celtic backgrounds has again decreased [down to 6.5 per cent],” it says.

“It’s unlikely that the board would have a director with a disability or who is Indigenous or LGBTQ+.”

This outcome is unsurprising as boards in Australia adhere to the principle of being skills based. In theory, this is sound governance. In practice, director recruitment tends to privilege the same career pathways, professional networks, and lived experience that already dominate the boardroom.

“Narrow selection criteria or assumptions around status and experience could exclude candidates with outstanding credentials,” Watermark warns.

This is a polite way of saying that recruitment to boards is a form of homophily, a tendency to bond or associate with similar others.

On this matter the governance literature is unequivocal. Research from the Australian Institute of Company Directors, Deloitte and Harvard Business Review point to board roles being filled through personal referrals, not open competition.

Even when a recruitment firm is used, the process is informed by criteria derived from the skills matrix – typically governance qualifications, ASX experience, accounting, law and traditional executive pathways – along with the ‘type’ of person being sought.

In other words, boards start with a familiar picture and go looking for someone who fits it.

Norway learned this lesson early. I heard firsthand during a fact-finding mission that, when gender quotas were introduced, boards fished from the male pond for referrals.

The outcome was the ‘golden skirts’: a small cohort of women appointed to multiple boards. It confirmed that, even when the gate is widened, the outcome is stymied if the same gatekeepers remain.

According to the Watermark report, men still hold the majority of board seats and board chair roles in Australia, which leads me to worry if we have a persistent ‘golden pants’ problem.

In rugby union’s Golden Oldies competition, players aged 65-69 wear gold shorts to signify they must not be touched or tackled. Are we applying this code in the boardroom, too?

Boards are the overseers of value creation for their shareholders and, in doing so, seek to attract diverse investors, customers and employees. However, they don’t reflect that diversity but rather comprise specialists who meet the narrow selection criteria.

With a growing body of research showing that boards need generalists as much as specialists, Harvard Business Review notes that generalists are better at connecting disparate information and recognising patterns across the whole system.

Deloitte finds that generalists strengthen enterprise-wide risk oversight because they see interdependencies that specialists often miss (an essential ingredient in value creation).

The research demonstrates that boards benefit from having people who are ‘unlike us’, often referred to as the wildcard candidate.

Watermark notes that diverse directors “identify risk earlier” and bring “fresh perspectives to stubborn problems”, particularly in periods of geopolitical instability and technological disruption.

The latter is no doubt driving the recent focus on recruiting for directors with IT, cyber and digital skills.

Deloitte’s research shows that heterogeneous boards make “more robust challenge” possible and improve decision-making quality.

Harvard Business Review goes further, arguing that cognitive diversity reduces blind spots created by homogenous lived experience. In short, boards with directors who have different backgrounds, pathways and perspectives are better positioned for growth, innovation and effective risk mitigation.

Watermark’s 12-year dataset shows positive change for gender diversity because boards put gender on the agenda and government-mandated reporting.

Performance is there for all to see in the annual reports of ASX-listed organisations, with current reporting standards offering an array of measures. However, the Australian Securities and Investment Commission is considering what constitutes core reporting, and diversity may not be one of them.

In the absence of visibility and transparency in the future (with the exception of gender, which has mandated reporting to the Workplace Gender Equality Agency), will boards maximise potential by taking steps to widen their selection criteria to include someone not like they are?

• Marion Fulker is an executive coach and the WA state chair of Smartgroup