Bums on seats will be project's success

19:07, Jun 25 2013
IAG chief executive Jacki Johnson
TOO RARE: IAG chief executive Jacki Johnson want diversity, not just of gender but of ethnicity in business.

Jacki Johnson is an exception: a powerful woman in an industry dominated by men.

This is not new - in insurance, as in so many professions, most of the top managers and almost all number crunchers are men. Specifically, white men. It would be natural if Johnson, the chief executive of insurer IAG, wanted to see more variety in the faces around her. But she has other reasons.

If there is no ethnic diversity in her underwriting and actuarial teams, how will they serve the culturally mixed bag of customers expected to be buying insurance in 2020? If there are no women at the board table, how will insurers find enough talent in a workforce full of retiring baby boomers and increasing proportions of highly qualified young females?

It's not just about avoiding group-think, it's demographics.

"If you start to think about the diversity of ethnicity in Auckland, it's a question of how we are going to be prepared for that," says Johnson.

"We're a small country with a small talent pool. ... If we're not getting females in the pipeline we are not looking at a diverse enough talent pool to get the best people."


Johnson is among dozens of chief executives and big-company directors pledging their time to a new diversity project, Diverse NZ Inc. It relies on pledges of $20,000 each from big banks, accountants, telcos, law firms, Fonterra, Microsoft and the Treasury to fund its first two years.

By the official launch at the end of next month, Diverse NZ wants to enrol 40 companies with more than 50 staff each on board to pay for a project director, a research analyst, and the development of materials to be shared via an online portal.

The first step is a stocktake of existing research and projects. Then they will run pilots of the best ideas. Ultimately the group is aiming to build a 10-year project that can count its gains in bums on big corporate board seats and chairs at top executive tables.

Chorus chairwoman and chairwoman of Diverse NZ Inc's governance group Sue Sheldon says the group does not want to cannibalise other diversity groups and will work with 25 Percent and others.

"We want to try and better co-ordinate the existing initiatives that are in the market."

But there is a sense among the group that existing efforts have been too slow and too divided into single-focus groups.

"(25 Percent) ... haven't really been able to activate any work to date, and that is something they are well aware of," says Faye Langdon, executive director of Global Women, which is supplying Diverse NZ Inc's secretariat.

"If you were to do a baseline comparison analysis against what [women-on-boards advocate] the male Champions of Change have achieved in Australia, it was quite significant in one year."

New Zealand is not making full use of almost half of its skilled migrants, and women make up only one-fifth of senior managers of the top 100 companies, the group says.

"We know our leadership talent pool is starting to contract at a pace," says Langdon.

"We have a leadership deficit of up to 40,000 people as the baby boomers retire.

"W know our skilled migration is coming in [yet] we can't seem to move the dial very quickly in New Zealand. It has languished for a long time."

Sheldon says there is now a vast body of international research showing companies do better when they have more diverse viewpoints - specifically, women and people from different cultural backgrounds - taking part in top-level decision-making.

In August 2011, Goldman Sachs estimated closing the gap between male and female employment rates would boost New Zealand's GDP by 10 per cent, and singled out the lack of women in leadership and on boards as needing urgent attention. Sheldon and Langdon say most chief executives do not dispute it. They want to act. But they don't know how.

In one way, women are the easy part: Diverse NZ Inc would dearly love to persuade the NZX to require companies to report on ethnic diversity, but first they would need to help companies measure it.

Sheldon says measurement often relies on voluntary surveys, which can have incomplete coverage. Langdon is confident there are enough precedents available from places like Australia and Toronto to do it. But first, chief executives need the tools.

Langdon, Sheldon and Johnson all talk about "pipelines". They mean the concept of getting a mixture of people into a business, then channelling the most talented ones to the top. At its most basic, it is about succession planning so key roles are never left dangling when someone leaves.

But Diverse NZ wants to broaden the pipelines, too. Sheldon says this might mean recognising talent in new places or helping a broader range of people see the talent in themselves.

"How do you encourage people to put up their hands?" asks Johnson. In a typical scenario a man will say "OK, I'll have a shot" when they might have a 10 per cent gap in their knowledge, she says.

"Whereas the female says 'I only have 90 per cent of the skills'. You have to back them for the 90 per cent they are bringing to the role."

As Rachel Hunter often said, it won't happen overnight. Johnson has just hired a young female actuary with a psychology qualification - a fresh and promising combination. But it will be years before the people in her intake are ready for the top jobs.

Often, talented people seem to strike a blockage about half way up. Eighteen months ago IAG surveyed its workforce and found it had good ethnic diversity in New Zealand, at least compared with the Australians.

But that broad mix of people was not flowing up to senior management. Women were also not reaching the very top, despite a policy requiring at least one male and one female candidate to be shortlisted for every key job.

Johnson is keen to share what she's learned and to learn from other big corporates.

But candidates need to be credible, she says.

"There is nothing worse than being seen as there to make up the numbers - it's one of the things I hate as a female leader.

"We're not saying we're going to force a quota and the females or whoever will get the job. But it's pretty hard to work on diversity if you don't have them coming through in the pipeline."

For Johnston the question is how to force recruitment processes to look at more diversity.

"Because otherwise we are just going to mirror the past."


Diverse NZ Inc Governance Group

Chairwoman: Sue Sheldon, director and Chorus chairwoman

Bruce Hassall, CEO PwC

Russell Stanners, CEO Vodafone NZ

Paul Muckleston, MD Microsoft NZ

Jacki Johnson, CEO IAG NZ

Chris Caldwell, MD Fonterra

Traci Houpapa, chairwoman Federation of Maori Authorities

Anthony Healy, director relationships BNZ


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