Macquarie has the best board in Australia according to fund managers. Who else makes the list?

Mon 19 Jun 23, 9:10am (AEST)
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Key Points

  • Effective boards are aligned with management and have skin in the game
  • They must be open about their decision-making process and willing to answer questions from shareholders
  • The top 10 ASX 100 companies in terms of board effectiveness include Macquarie, REA Group and Brambles, according to MarketMeter

The buck stops with the board.  

A strong board is the ultimate overseer of ethical behaviour, ensuring a company is acting in the best interests of customers and investors, whilst also adhering to relevant laws and regulations. 

A strong board ensures the ongoing good reputation of a business and success when aligned with management, while a weak board with poor alignment with management can spell enormous problems.

Think Enron or, more recently, FTX where a strong board could have prevented fraudulent activity. Or more recently, the PwC tax scandal which has not only seen directors removed, but an overhaul of its governance board.

In light of this, researching the board of a company and how effective it is should be an essential component of any due diligence process before investing.

MarketMeter has shared its research on the top-ranked ASX-listed companies by institutional investors for Effectiveness of Board. There are some names you might expect, and others you won’t.

I also spoke to Henry Jennings, market analyst and commentator for MarcusToday, for his views on the importance of an effective board and the rankings.

And finally, Livewire and MarketMeter reached out to Macquarie Group for its take on corporate governance, setting the tone from the top, and how it measures board performance. 

What is MarketMeter?

MarketMeter is an interactive platform that measures and benchmarks institutional investor perceptions of Australian listed companies, who find it a reliable risk management tool to understand their performance in the eyes of institutional investors.

“With the benefit of super fund data partnerships, MarketMeter has a deep, high-quality data pool which can help fund managers understand how their stock perceptions differ from their peers, category by category, and by how much,” says Nicholas Coles, Managing Director and co-founder at MarketMeter.

The platform enables institutions to score companies from 1-10 on a range of factors. Participants are then able to see how their views compare to those of other professional investors. Companies are evaluated across 27 factors grouped in categories of financials, ESG, management, strategy and engagement.

MarketMeter's first-half calendar year 2023 research saw 138 institutions participate, including buy and sell-side organisations. 

What makes an effective board?

MarketMeter’s definition follows:

"The performance of the Board in selecting and monitoring an effective CEO, succession planning and the oversight of strategic direction, social responsibility and corporate ethics. The provision of a solid corporate governance framework and a disclosure environment that promotes transparency for stakeholders are key considerations."

Top 10 ASX 100 companies in terms of Effectiveness of the Board

These are the ASX 100 companies that fund managers scored highest with regard to Effectiveness of the Board. The list appears in order based on the results of the most recent MarketMeter research.

  1. Macquarie Group Limited (ASX: MQG)

  2. REA Group (ASX: REA)

  3. Brambles Limited (ASX: BXB)

  4. The Lottery Corporation Limited (ASX: TLC)

  5. Fisher and Paykel Healthcare Corporation Limited (ASX: FPH)

  6. Xero Limited (ASX: XRO)

  7. Goodman Group (ASX: GMG)

  8. ALS Limited (ASX: ALQ)

  9. Ramsay Healthcare Limited (ASX: RHC)

  10. Amcor PLC (ASX: AMC)

Analysis of the Top 10

Expert Insights EDM (11)
Former RBA Governor Glenn Stevens is the current chairman of the Macquarie board

The following commentary was provided by Henry Jennings, market analyst at MarcusToday (and ex-Macquarie employee). 

Were you surprised by any of the names on the list?

There are a few names there that wouldn’t have automatically sprung to mind. The likes of ALS for example, nor would Fisher & Paykel. Lottery Corporation has only been in existence as a separate entity for a little while and don’t have the track record. Xero has a new CEO and has been a volatile stock, though that hasn’t really got much to do with the board. I was probably more surprised by the exclusions rather than the inclusions.

Do you agree with the rankings of Macquarie Group and REA Group in the top two positions?

REA Group was a surprise. It’s 61% owned by NewsCorp. It’s obviously a very well-managed firm and there’s never been any issues with the board or management of it but I’m surprised it would be number two given Newscorp is a significant shareholder.

In terms of Macquarie. I worked with Macquarie for seven years. They do attract the top talent and the board has been very stable. They’ve got some talented people on the board because of their reputation and their salary structure. 

They can attract the top echelons of corporate Australia so I’m not really surprised to see it there. It is very well managed and conscious of ESG considerations as well. 

They’ve been quite good with the Macquarie Foundation in terms of charitable causes as well. I would have expected it in the top 10, though not necessarily number one positioning.

Who would you have expected to be on the list?

There are no resource stocks in there. 

"BHP Group (ASX: BHP) is well managed, has a good board and is the biggest mining company in the world. It would have been in my top 10 by virtue of size and the fact they have tried, despite being a mining company, to be a good corporate citizen with a good culture and ethos. I’m surprised they’re not in there."

"In the healthcare space, CSL Limited (ASX: CSL) has a very strong track record. If you look at Ramsay, there has been some problems in the past with the board and a takeover attempt. I would have put CSL ahead of Ramsay in terms of board and governance."

What is a green flag for you in terms of a strong board?

It’s always good to see a board that has skin in the game. 

There are many boards with non-executive directors that have very little skin directly in the game. They may have options and incentives but there’s nothing that gives investors more confidence in a company’s outlook than the directors themselves actually buying parcels of shares. If people are putting their money where their mouths are and they are inside trades so they know far more than anyone else, then that is a positive sign.

Comments from Macquarie

Livewire and MarketMeter reached out to Macquarie Group to share more detail on its corporate governance and strategic direction. The responses are provided below 

What is Macquarie’s approach to corporate governance?

Macquarie’s approach to corporate governance is outlined in our 2023 Corporate Governance Statement available on Our approach is to:

  1. Identify and realise opportunity for shareholders, clients, employees and communities;

  2. Promote the long-term profitability of Macquarie while prudently managing risk;

  3. Drive superior and sustainable shareholder value over the long-term; and

  4. Meet stakeholder expectations of sound corporate governance.

From a Board oversight perspective, how does the Board set the ‘tone from the top’?

Board members have broad contact with staff at various levels within the organisation and across regions. There is a culture of open and frank discussion at the Board.

Aside from a full schedule of formal Board and Board Committee meetings, the Board’s program also typically includes items such as workshops on current relevant topics, meetings without Management, attendance at staff functions, and visits to Australian and international operations.

Fund managers may have ranked Macquarie #1 in this category, but how does the Board measure its own performance?

The Board undertakes a formal annual performance assessment to review its performance and the performance of each Director with emphasis on those individual Directors who are required to stand for re-election at the next AGM.

Every three years an external facilitator conducts the Board’s performance review. In the intervening years, an internal performance assessment is led by the Chair with the support of the Company Secretary.

For further information on Macquarie’s corporate governance arrangements, refer to Macquarie’s 2023 Corporate Governance Statement available on

Macquarie is externally renowned for its strategic direction, how much focus does this element receive internally? Is it at the apex of internal conversations?

Strategy and business planning activities are undertaken annually by each of Macquarie’s Operating and Central Service Groups, as well as being considered from a Group-wide basis. These strategies are reviewed in detail by the Board every year.

Additionally, the Operating and Central Service Groups’ strategies are consistent and integrated with the Risk Management Strategy and Risk Appetite Statement, which are also reviewed and approved by the Board annually.

This enables Macquarie to pursue growth opportunities within the boundaries set by the risk appetite. The Board Risk Committee (BRiC) assists the Board by providing oversight of Macquarie’s risk management framework and advising the Board on Macquarie’s risk appetite, risk culture and risk management strategy. The BRiC constructively challenges management’s proposals and decisions on risk management arising from Macquarie’s activities.

A closer look at Macquarie Group

Source: Market Index, 14 June 2023

Director trades - Who is buying and selling at Macquarie

Source: Market Index, 14 June 2023

This article was first published for Livewire Markets on Friday, 17 June 2023.

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Written By

Sara Allen

Content Editor

Sara is a Content Editor at Livewire Markets and Market Index. She is a passionate writer and reader with more than a decade of experience specific to finance and investments. Sara's background has included working at ETF Securities, BT Financial Group and Macquarie Group. She also holds a degree in psychology which drives a continued fascination with how human behaviour drives and is driven by investments and market activity.

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