February 1, 2019: Following the New Zealand Stock Exchange (NZX) Gender Diversity Statistics report for summer 2019, Global Women calls on the chairs and directors of the 27 NZX-listed companies with all-male boards to take steps to address gender imbalance which leaves New Zealand trailing the UK, US and Australia in board diversity.
International research shows that increased representation of women in senior roles improves shareholder returns, is good for business, and improves risk management.
As more people become aware of the benefits, they will begin voting with their wallets, according to Miranda Burdon, CEO of Global Women.
“A number of key fund managers have made it clear that diversity at the executive and board level is a significant factor in their investment decisions, and we expect to see more investors jump on board as they better understand the risks of group-think decision-making,” says Miranda Burdon.
“We encourage consumers and investors to review the list of companies and to consider their investment choices carefully.”
The NZX diversity report shows that the percentage of women directors rose from 19% to 22% in 2018. The NZX saw a similar increase in female officers. Companies with a diversity policy rose to 77%.
Despite these slight increases, New Zealand, where 18% of listed companies have zero female directors, lags far behind other developed countries.
In the US, only 2.6% companies are without female directors; in Australia it is 4.4%; and India only 6.6%.
In the U.K., France, Finland and Italy, every listed company has at least one female board member.
“The talent pool of highly educated, experienced and ambitious women in New Zealand is deep and growing, so there’s no excuse,” said Miranda.
“Quite frankly, these numbers are embarrassing for us as a country, especially given our reputation for egalitarianism and equal opportunity. Evidence shows the imbalance also affects our prosperity and reduces the likelihood as a nation we will be innovative and adaptable to fast-moving trends.”
Of the NZX-listed companies, 33 increased the percentage of women on their boards.
Miranda notes that these companies demonstrate what is possible with effort and leadership.
In response to requests for help in addressing this imbalance, Global Women recommends five practical solutions for boards looking to recruit female board members.
- Boards could extend use of a skills matrix to map existing interpersonal skills and demographic attributes as well as more standard board skills and experience, to identify gaps, then recruit for missing skills from different professions.
- Boards need to be specific about the experience needed and start to plan for succession well in advance recognising it may take longer if different skill sets are being sought than traditionally. Talent pools open up significantly once boards move away from requiring previous C-suite or board experience and instead contemplate what skills will be needed for future growth.
- Boards should tap into different networks and ensure the recruitment longlist includes names that the Chair and Directors do not know. This means using specialist recruitment firms for board diversity, advertising vacancies, considering people outside of the corporate mainstream and actively seeking different perspectives.
- Boards that have a fixed tenure guarantee rotation of directors and exposure board members to fresh thinking and perspectives. Fixed tenure also brings a focus to succession planning.
- Finally, boards should challenge themselves to create an inclusive culture where different perspectives are encouraged, respected and valued.