It's time for boards of businesses to take gender and ethnicity seriously as a risk mitigation strategy, says Siobhan McKenna.
It's time for boards of businesses to take gender and ethnicity seriously as a risk mitigation strategy, says Siobhan McKenna.
Minister for Women Julie-Anne Genter last year set a compulsory target that women make up half of the directors on all state sector boards and committees by 2021.
This was a stretch goal, yet the public sector has jumped ahead to reach 50/50 representation at CEO level and close toparity at board level. The question is, do New Zealand's commercial organisations need targets too?
According to the latest NZX diversity data (January 2019), the percentage of women directors on listed company boards increased from 19.7 per cent to 22.5 per cent in 2018.
That percentage has been moving upwards for some years, but at glacially slow pace. As of January, approximately 18 per cent of New Zealand listed companies had no women on their boards, which sets us far behind other countries such as the United States, Australia and India.
Global Women and its affiliate Champions for Change work with leaders of major New Zealand corporate, government and non-profit organisations who recognise the value of having varied perspectives around the decision-making table—and who value fairness of opportunity.
Latest NZX diversity data (January 2019), the percentage of women directors on listed company boards increased from 19.7 per cent to 22.5 per cent in 2018. Photo / Getty Images
Champions for Change includes 54 CEOs and Chairs of some of New Zealand's largest workplaces, representing more than 110,000 employees across 39 organisations.
As a collective, Champions for Change companies have committed to driving an aggregate 40:40:20 balance at all levels of employment.
What that means is that at each level of seniority across the group as a whole, there would be 40 per cent of both women and men, with the remaining 20 percent being of either gender, allowing for a natural employment flow.
Though only in existence for just over three years, Champion organisations are already taking action on programmes and policies that are known to drive diversity and inclusion. They adopt the approach of learning by doing.
For instance, more than 83 per cent of Champions for Change organisations have implemented flexible working policies for men and women—one of the known pathways to creating an inclusive and diverse working environment.
Champion organisations also invest in their female talent pipeline by sponsoring promising young leaders through leadership development programmes.
And, its CEOs and Chairs come together regularly to have frank and open discussions about practical ways to increase the uptake of diversity programmes and policies.
One of Champions for Change's greatest achievements to date is its commitment to the measurement of progress. The Gender Diversity Report debuted in 2018 and is New Zealand's first and largest survey of gender at all employment levels, from entry-level employee to board member.
The Report captured 80,000 responses; for the first time, we could track how many men, women and non-binary people are employed at each level of seniority – and all through voluntary reporting.
When we analysed the data, we found that organisations within the Champions for Change group had, on average, 35.4 per cent women at board level – a greater percentage than the NZX with 22.5 per cent.
At CEO level, the Champions Group reported 33.5 per cent women—almost double the comparable NZX figure of 19 per cent.
What our Gender Diversity Report data shows is that while Champion organisations are outperforming other groups here and internationally, no one Champion organisation has yet, achieved 40:40:20 across all management levels.
It seems the challenge is not so much in getting women in the front door, as there is close to equal representation at entry level; rather, it's ensuring they can climb up the organisational ladder.
In 2019, the goal is to account for all 110,000 employees under the Champions umbrella and gather anonymised data on their gender and ethnicity numbers. Knowledge and a clear idea of where we are makes it possible to chart a more accurate course to where we need to be.
Simply put, diverse organisations do better, and if boards are not choosing diversity, and setting themselves measurable goals and standards, they are handing the advantage to those that do.
