Directors of listed companies more likely to be Aucklanders and male

Directors on New Zealand’s publicly listed companies are more likely to be from Auckland and male compared to government-appointed boards, research has revealed.

Chapman Tripp has analysed the make-up and tenure of boards for New Zealand’s 75 largest listed companies and compared them to 47 crown entities as part of an annual review of corporate governance.

It found that while 48 per cent of directors of top listed companies lived in our biggest city just 39 per cent of Crown entities had directors that lived in either Auckland or Northland.

Roger Wallis, a partner at Chapman Tripp, said the listed sector appeared to be Auckland-centric.

“I’m not sure that is a good thing . . . as [regional development minister] Shane Jones is appropriately reminding us.”

Wallis said the skew was probably because a lot of listed companies were Auckland-based and recruited directors from existing networks.

The research also showed boards of Crown entities had more women directors with 38 per cent compared to 23 per cent for the top 75 listed companies.

The report noted there had been very little progress on increasing gender diversity across listed boards despite a number of vocal initiatives for change.

At 23 per cent the ratio was virtually the same as 2016 and 2015. Only one chief executive in the top 75 companies was female and 9 per cent of chairs were women.

That was despite the NZX introducing diversity reporting into its corporate governance code, political pressure from the minister for women and a campaign by KiwiSaver provider Simplicity to persuade the top 50 listed companies to improve the diversity of their board and senior management.

Wallis said the difference highlighted the fact that Crown entities had a directive to have more diversity on boards.

“They don’t have quotas but have a broader dispersion of where people live and a higher representation of women on boards.”

Crown boards also tended to be smaller at an average of 5.9 directors compared to 6.1 and have a shorter length of service with the average 4.2 years compared to 6.2 years for publicly listed companies.

Wallis said one of the trends it had noticed in the past year was a lower level of visible shareholder activism.

“In contrast to 2016 which delivered several high-profile examples of shareholder activism, 2017 was characterised by more “behind the scenes” engagement between boards and shareholders.

“We think this is overall a more constructive approach.”

Wallis predicted this year would see boards continue to be subject to high levels of scrutiny with all companies due to meet new requirements in the NZX’s corporate governance code by September this year.