Eric Watson: Why having women on board is a win-win

Female directors such as Joan Withers rightly argue that quotas are demeaning to women appointed to boards. Photo / Doug Sherring

Opinion

This weekend highlights the start of an NRL initiative called Women in League which celebrates women involved in what has traditionally been a male-dominated domain. To recognise and celebrate women in league, the Warriors will wear a special jersey for today's game and the guard of honour will be their partners, wives and mothers.

I know I share the same views as Jim Doyle, the NZ Vodafone Warriors CEO, and the Board, that having women involved at all levels of our business is critical to our success.

Rest assured that they are in their roles because of their skills and expertise, along with the different perspective they bring to the table. As a business we absolutely cannot afford to lose sight of the fact that women comprise almost 50% of the Warriors fan base.

It is well established that increased diversity yields better business decisions, which logically should flow through to improved economic growth. As shown by a University of Otago study, diversity at the governance level is a win-win for gender equity and financial performance, with the proviso that this happens more if it's not a "token" presence.

Two of the study's authors, Whiting and Roberts, noted that diversity is beneficial because women are more diligent and have links with different sets of customers and stakeholders while bringing a different skill set, often more objectivity and focus on detail.

I was intrigued to see news a while back that Germany passed a law that requires listed firms with employee representation on their boards to allocate 30 per cent of their board seats to women. Like several other European countries before it (Norway was the first), Germany legislated quotas because it sees benefits accruing from improving the gender balance of boards, but firms have been slow to move.

As in Europe, the role of women in the senior echelons of New Zealand businesses needs to be increased. Statistics published for 2014 by the NZX show that just one in seven listed companies' directors were female.

But are quotas the right way to go? Female directors such as Joan Withers rightly argue that quotas are demeaning to women appointed to boards. I agree - women should be appointed to boards because of their worth; I highly doubt Niki Schuck would have been happy accepting a board seat on the Warriors marked "For women only".

I don't think quotas will necessarily lead to true diversity. It doesn't take much research to see that there are core groups of men and women in New Zealand that occupy multiple governance roles.

While a degree of concentration is probably necessary or even unavoidable in a small market such as New Zealand, I find it very hard to believe that there are not sufficiently qualified people in New Zealand to fill governance roles without such a high degree of nepotism.

Judging from the FMA's 2015 Strategic Risk Outlook, our regulators are thinking the same thing, noting that the "interconnectedness of directors" is a driver of risk.

I spent some time trawling through the websites of listed New Zealand companies in the NZX50 to get a feel for the genders of their CEOs. Is this any better than women on boards? How many would you guess are female?

None. Not one!

There are plenty of women in senior management roles, proportionately even more than there are female directors. Not unexpectedly, many women are in "people" roles but all of the CEOs are men, mostly middle-aged New Zealand Europeans.

It seems that the first step involves getting more women into CEO and non-traditional senior management roles. How do we do that? (1) Mentoring women. (2) Affording women in traditional roles opportunities to test themselves in other areas of the business. (3) Creating opportunities for them to be part of board meetings.

In no way am I saying my companies are leading the way, but what I am saying is perhaps we all need to dedicate some time to reviewing our organisations. One thing I definitely know is that I am always in the market for smart thinkers who are in tune with what's happening in the world around them. On Saturday, come and celebrate our women in league. The New Zealand Vodafone Warriors are definitely the better for their involvement.