Boards without Broads: The Dearth of Diversity in New Zealand: Why Does New Zealand Corporate Decision-Making Largely Take Place in What Could Be Described as the "Men's Room"? the Latest Census of Women's Participation Reveals That 60 Percent of Our Listed Companies Completely Lack Any Feminine Touch in the Boardroom. Is This Lack of Diversity Damaging? Can the Balance Be Redressed?

By Jayne, Vicki | New Zealand Management, June 2008 | Go to article overview

Boards without Broads: The Dearth of Diversity in New Zealand: Why Does New Zealand Corporate Decision-Making Largely Take Place in What Could Be Described as the "Men's Room"? the Latest Census of Women's Participation Reveals That 60 Percent of Our Listed Companies Completely Lack Any Feminine Touch in the Boardroom. Is This Lack of Diversity Damaging? Can the Balance Be Redressed?


Jayne, Vicki, New Zealand Management


[ILLUSTRATION OMITTED]

HIGH profile political and legal leaders aside, this country's early embrace of gender equity seems to have stalled somewhere below the senior executive ranks of corporate New Zealand.

According to the latest census on women's participation in the workforce, women's progress into the nation's boardrooms is proceeding at glacial pace. In 2006, they held 7.13 percent of directorships in our top 100 publicly listed companies; this year it's 8.65 percent with 45 women holding 54 directorships out of a total 624 positions. The tally in the New Zealand Debt Market is just 5.73 percent, while the alternative market (NZAX) is heading determinedly south--from 16.39 percent in 2004 to 5.74 percent in 2006 and a new low of 5.07 percent in 2008.

Things look better in the public sector where an intentional push toward increasing female participation over more than a decade had raised representation on Crown Company boards to 35.43 percent in 2006--though that slipped to 34.07 percent in the latest count. The total government board and committee stock-take for women's representation is 42 percent but slowing progress raises concerns that the public sector won't reach its target of 50 percent by 2010.

Given that women now represent more than 46 percent of the workforce, why don't more make it to the upper levels of business? Is it lack of desire, absence of ambition, or conflict with family responsibilities? Are there just not enough women with the skills to take on top jobs? Or has the existing skew become self-perpetuating as bloke-laden boards opt to go with the comfort of their kind?

And does this lack of broads make boards less broad-minded? This is not a flippant question given increasing evidence that the diversity of input going into problem solving or decision making tends to improve the output.

Last year, a research study found that Fortune 500 companies with the highest representation of women board directors attained significantly higher financial performance, on average, than those with the lowest representation of women board directors. And those with three or more women directors did notably better.

The four-year Catalyst study (The Bottom Line: Corporate Performance and Women's Representation on Boards) tracked the performance of 520 companies on three critical financial measures: return on equity (ROE), return on sales (ROS) and return on invested capital (ROIC). It found those with the highest number of women directors outperformed those with the least by 53 percent on ROE, 42 percent on ROS and 66 percent on ROIC. This correlation between gender diversity on boards and corporate performance can, it says, be found across most industries--from consumer discretionary to information technology.

It's not an isolated finding. Another recent study from the London Business School has found professional teams with an even gender mix deliver optimal performance in most areas that drive innovation--they are more likely to experiment, share knowledge and fulfil tasks. After surveying more than 100 teams of "knowledge workers" at 21 companies across 17 countries, the study concluded that mixed teams work best because individuals tend to contribute less fully and confidently if they are in a minority--and this applies to men as much as women.

It found gender imbalances, on the other hand, create a significant deterioration in knowledge-based work with regard to experimentation, knowledge transfer, the capacity to work across functional or business boundaries and general efficiency. These results were consistent regardless of the sex of the team leader.

Meanwhile, research at the University of Helsinki found companies with female chief executives or board directors achieve a 10 percent higher return on capital, regardless of the company or sector.

So--is the local corporate sector doing itself a disservice by not more actively promoting women to the nation's boardrooms? …

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Boards without Broads: The Dearth of Diversity in New Zealand: Why Does New Zealand Corporate Decision-Making Largely Take Place in What Could Be Described as the "Men's Room"? the Latest Census of Women's Participation Reveals That 60 Percent of Our Listed Companies Completely Lack Any Feminine Touch in the Boardroom. Is This Lack of Diversity Damaging? Can the Balance Be Redressed?
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