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Women of Influence
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 CEO 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 who are 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 groupthink, 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 step back and think about getting the best talent we can, 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 CEOS and big-company directors pledging their time to a new diversity project.
Called 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 leaders will also share ideas.
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 ten-year project that can count its gains in bums on big corporate board seats and chairs at top executive tables.
New Zealand is not short on diversity projects.
The 25 Percent Group of business leaders, for example, was launched last year with a target of increasing female participation on New Zealand boards to 25 per cent by 2015.
Chorus chairwoman and chairwoman of Diverse NZ Incs's governance group, Sue Sheldon, says the group does not want to cannibalise other groups and will work with 25 Percent and others.
"We want to try and better coordinate the existing initiatives that are in the market... We certainly don't intend to be competing with anyone else."
But there is a sense among the group that existing efforts have been too slow and too divided into single-focus groups.
"(25 Percent) was launched with absolute commitment but they 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 advocates) the male Champions of Change have achieved in Australia, it was quite significant in one year."
Despite various efforts 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."
"We're well aware of what our populations stats are, we know our skilled migration is coming in [yet] we can't seem to move the dial very quickly in New Zealand," says Langdon. "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 CEOs do not dispute it. They want to act. But they don't know how.
Says Johnson: "We're getting a lot of feedback from management that either they don't know where to start or how to progress further. Even the chief executives who are doing well on gender diversity say they just don't know about ethnic diversity."
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 CEOs 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 male will say "okay I'll have a shot" when they might have a ten 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."
"If people can't see themselves in the next role above them they are not going to aspire to do it," says Sheldon. "It might be as simple as flexible working at different ages (or) identifying some unconscious bias in the recruiting process."
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 halfway up.
Eighteen months ago IAG surveyed its workforce and found it had good ethnic diversity in New Zealand, at least compared with the Australians ("It's very rare you'd see a high population of indigenous Australians serving customers.
Here we've got a great ethnic diversity in front line staff in all functions," says Johnson.) But that broad mix of people was not flowing upwards to senior management.
"It might carry through to team leader but once we get to middle management and senior leaders it's not," says Johnson.
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.
Sometimes women were not even reaching the bottom. "In specific groups of functions like underwriting and actuarial we're not getting them coming through the pipeline at all."
Johnson is keen to share what she's learned and to learn from other big corporates.
But - and this is a sore point - she stresses she is not talking about quotas. "They (candidates) need to be credible. 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 do we make sure we force our recruitment processes to look at more diverse populations?".
"Because otherwise we are just going to mirror the past."
Who's involved? Diverse NZ Inc Governance Group
Chair: Sue Sheldon, professional director and Chorus chair
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, Chair Federation of Maori Authorities
Anthony Healy, director relationships BNZ
**The inaugural Women of Influence awards has been launched by Westpac and Fairfax Media to recognise and celebrate women in all walks of life who make a difference to the lives of all New Zealanders. The programme will identify the 50 most inspiring women of New Zealand in a broad range of categories; management & business, local & regional, entrepreneur, community service & social enterprise, innovation and science. You can nominate a woman here until August 25.
- © Fairfax NZ News
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