NZX gender diversity stats show women directors up, senior managers down

27 Oct 2015

The number of women on public company boards has lifted although the number of senior women executives has gone down slightly in the past two years, according to NZX's gender diversity statistics.

The ratio of men and women on listed boards is sitting at 83/17 percent for the September year to date compared to 88/12 percent in calendar 2013, the first year the stock exchange started tracking the gender divide. The percentage of women senior management officers is 18%, one percentage point lower than two years ago.

The latest gender update comes after government data last week showed just 1.9% of women were employed as general managers in 2013, almost half the 3.9% of men working in the same position. The report found women were almost as likely as men to work in managerial roles, largely concentrated in female-dominated industries such as education and health and community services, but were much less likely to hold senior management roles in private business.

NZ Shareholders' Association member Des Hunt, who with Stephen Tindall and Institute of Directors president Michael Stiassny, set up the Future Directors scheme two years ago, says momentum for change is gaining speed after being initially slow to build. It will take another two to three years for the results to show up in the gender diversity statistics, he said.

The Future Directors scheme lets candidates observe and participate on a company board for a year (without voting rights) while exposing the company to prospective directors they may not have considered before.

Hunt said it has been easier to sell boards on the benefits of diversity than solely on gender, which met some resistance.

Meanwhile, the 25 Percent Group's target of boosting female participation on boards to 25 percent by this year fell well short, with even large public listed companies only improving to 20 percent. The 25 Percent Group launched in 2012, with the objective of focusing attention on the economic rationale and need for far greater diversity around the board room tables of New Zealand’s largest public companies.

The Future Directors scheme now has 10 companies signed up of which half have agreed to mentor one of 370 prospective candidates on the database annually. Another four to five companies are in the process of joining, Hunt said.

Chairmen traditionally argued there was a dearth of women with the necessary talent to appoint to boards but that attitude has now changed, he said.

"Everyone who has gone on the programme has spoken highly about the quality of people. And I also notice shareholders at annual meetings have been getting up and saying they're pleased the company has started the programme," Hunt said.

Of the placements made so far, eight out of 14 have been women.

He said the government has also been talking about introducing the scheme to the boards of state-owned enterprises and government agencies.

Veteran director and former Fairfax Media New Zealand chief executive Joan Withers said people were now a lot more focused on diversity and "I describe gender as the first frontier of diversity."

She's hopeful that, as more women become directors, they will help boards, through remuneration committees, pay closer attention to whether diversity is also evidenced at the company's senior and lower management levels.

Mrs Withers, who chairs the Television New Zealand board, which has a majority of women directors, said a 2015 study by McKinsey and Leanin.Org dispels the myth that most women don't want top executive roles.

The study of 118 US companies said women are still under-represented at every level in the corporate pipeline and, at the slow rate of progress in the past three years, it would take 25 years to reach gender parity at senior management level and more than one hundred years to hit the C-suite (chief executive level and direct reports).

The report said one key reason women face obstacles on the path to senior leadership was that most women managers are in areas such as legal or human resources rather than the core functions with profit and loss responsibility that more often lead to the top. The other key reason was fewer women are entering even low levels of management than men, which suggests fewer women are likely to advance at every stage.

Seventy four percent of companies reported gender diversity was a top CEO priority but most of their workers didn't believe them, the study found.

"The whole point is to drive the executive team and board to avoid the pitfalls of group think," Mrs Withers said. "One of the challenges as we get older is to make sure the average age on boards reduces from where it was 15 to 20 years ago when a certain amount of people saw it as a reward for their executive career and stayed on the board for ever."

This article is published with permission from NBR

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