Widespread benefits seen in more women at top
The requirement for New Zealand publicly listed companies to report on the number of women they have at the top is a step towards diversity becoming the norm, the Equal Employment Opportunities Trust says.
Last night the NZX announced that listed issuers will have to provide a breakdown of gender composition at executive management and board level in their annual reports, and compare it to the previous year.
It will also evaluate companies' formal diversity policies, if they have one, but does not make such a policy compulsory.
The rule follows two months of consultation, and is subject to Financial Markets Authority approval. It will apply to NZX main board-listed issuers with a balance date on or after December 31, 2012.
EEO Trust chairman Michael Barnett said the rule would help people think differently about gender representation.
"We want to see a flow of women coming through management that will make up the representation in the boardroom. We need to ensure the pipeline is full."
The Global Women organisation congratulated the NZX on the diversity rule.
"Statistics show women globally represent half of the population, half the market and are the majority of purchase decision makers. Women are increasingly the customer, and boards need now to take action to ensure their composition reflects their target market," executive director Faye Langdon said.
Mighty River Power (MRP) chair Joan Withers said the rule would raise awareness about gender diversity.
The MRP board, of which four of the nine members were women, benefited from its diversity and was able to better manage the company because of it, she said.
"All of the people around that board table add enormously to the rigour of the debate, which is what deliberation is all about."
The NZX said research suggested diversity - particularly of gender - at senior management and board levels contributed to improved performance.
Groups like EEO Trust now had the job of making sure people understood diversity and appreciated its value, so boards like MRP's were no longer unusual, Barnett said.
"If there's a good education process now alongside this requirement it will just become the norm rather than an exception."
Quotas were not the way to go, he said. The important thing was for diversity in management to be seen as a valuable asset, rather than something companies felt they were obilgated to do.
Withers was also against the idea of quotas.
"As a woman I would hate to be appointed a director on a board because they are looking to fulfil a quota."
There was a range of skills and experience needed for a person to sit on a board, and companies shouldn't fill those chairs with women simply because they were women, she said.
NZX chief executive Tim Bennett said it was important to give listed companies the flexibility to make their own decisions about whether a formal diversity policy was a priority for them at this stage.
"Over time, we would like to see more listed companies taking the opportunity to report on diversity as a contributor to investing decisions made by shareholders."
The NZX said there was credible research suggesting diversity, and gender diversity in particular, at board and executive management level contributed to improved company performance.
But Women's Affairs Ministry figures show only 9.3 per cent of directors on the boards of New Zealand's top 100 listed companies are women and the number of women in management roles is only 21 per cent.
Women's participation in running and governing Australian corporates has risen markedly since it introduced diversity reporting two years ago. In the past year, a third of all new board appointments to ASX200 companies were women, compared with just 5 per cent in 2009.
The 25 Percent Group, comprising business leaders in the public and private sectors, was launched last month with a target of increasing female participation on New Zealand boards to 25 per cent by 2015.
All 12 founding members, including the likes of ASB chief executive Barbara Chapman and Progressive Enterprises boss Dave Chambers, have said they will improve diversity within their own companies and use their influence to encourage others to follow suit.