SYDNEY • All-male boards take note: your biggest investors have run out of patience.

The Australian Council of Superannuation Investors (ACSI) - whose members have over A$1.5 trillion (S$1.55 trillion) of funds under management - pledged to vote down boards that are not making sufficient progress on gender diversity.

"Our assessment is that engagement has failed," said ACSI chief executive Louise Davidson. "We've spent a lot of time and provided lots of opportunities for companies to really get their act together. That has not happened. So therefore we fall back to the next lever we've got, which is to start voting."

Institutional investors globally are increasingly concerned that too many firms are dragging their heels in appointing women despite evidence backing diversity.

Firms with strong female leadership made an annual return on equity of 10.1 per cent in 2015 versus 7.4 per cent for those without, MSCI research shows. A 2016 Credit Suisse Group survey of over 3,000 firms also found that more diverse boards achieved superior stock performance.

Said Ms Allyson Zimmermann, a Zurich-based executive director at Catalyst Europe, a global organisation focused on workplace inclusion: "Investors holding companies to account for their progress on gender diversity in the boardroom will have a massive impact.

"We're seeing that shareholders and investors are increasingly focused on the risk of not having a gender diverse board."

In Australia - as with other countries - the pace of change has slowed. While women hold 25 per cent of board positions, up from 8.3 per cent in 2009, three males have been appointed for every female so far this year, said the 30% Club. The group aims to reach its 30 per cent target next year.

Ms Patricia Cross, head of the Australian chapter of the 30% Club, said: "I think it's time for these beneficial owners, what I'd call the 'real' owners, to begin to flex their muscle in the diversity agenda."

ACSI is taking up that call. Come this annual general meeting season, the superannuation group will start recommending its members vote against the re-election of incumbent directors - starting with the chairman - of ASX 200 companies which still have no women on their boards.

While ACSI members' ownership of ASX 200 companies is not sufficient on its own to unseat a director, it is enough to send a "very strong" message, said Ms Davidson.

BLOOMBERG