Gender diversity and governance

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By JULIE HARDAKER
Lawyer and governance professional and Chair of Women on Boards NZ

There is no shortage of female candidates for board roles in New Zealand. There are plenty of qualified and capable women in this country with the skills and expertise to fill board positions in all sectors.

It’s always a cause for celebration when there is a positive move in gender diversity at governance level. Last month the Minister for Women, Julie-Anne Genter, announced that women occupying seats on state sector boards and committees had reached a record level of 47.4 percent for 2018, up from 45.7 percent in 2017.  The New Zealand government set a target of 50 percent last year for the more than 2600 appointments that are made to state sector boards every year from large SOEs through to community trusts and it seems to be working.

But the results from the private sector are sobering.  Fewer than one in four directors of New Zealand’s top 100 companies are women, and 20 of our top 100 corporates have no female board members at all. And at senior management level, only four of the CEOs running the NZX’s top 100 are women. Why are women not getting appointed and are gender diversity targets required in the private sector?

Mandatory quota targets are being used in other countries to reduce unconscious bias and closed shop selection to overcome barriers to gender equality in governance. A common example used to illustrate quotas is Norway where in 2003 it became law for listed companies to have at least 40 percent female members on their boards. The results show good progress.

In New Zealand the argument put forward for mandatory quotas is that progress on gender equality has been painfully slow and a step change is needed. Those opposed say quotas will result in appointing women without the skills and experienced needed and that ‘making up the numbers’ is demeaning for women.

Another approach to achieving equality was recently presented by academic Lata Gangadharan, an experimental economist at Monash University who has been undertaking research about an opt-out system. Under this system, women must choose to opt-out of a selection process which automatically has everyone in the running, rather than women opting in and putting themselves forward. She told the New Zealand Association of Economists conference in Wellington a few weeks ago that this system statistically brings more female candidates to the selection pool and can be used to improve gender diversity. She says this system can also bring to the surface people with a far broader range of personality traits and experiences and diversity.

The Ministry for Women has a database of experienced women that boards can access to find suitable candidates.  Women on Boards and the Institute of Directors also have access to a large database of women who are experienced governance professionals.

Board appointments are about appointing the best candidates for the job ensuring that fair consideration is given to all candidates whatever their gender.

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