Boardroom diversity stalled
A lack of progress for women on NZX boards brings a threat to unseat male directors.
‘‘I have been counting boardroom composition for 22 years and it has only gradually improved so that men now outnumber women by three to one,’’ says AUT professor Judy McGregor.
Progress towards gender and ethnic diversity in the boardroom had stalled, she said, and at the current rate of change gender parity on boards would take another decade to achieve.
The publication of the annual New Zealand Census of Women on Boards, by McGregor, barrister Cat MacLennan and Sam Stubbs from the Simplicity KiwiSaver scheme, showed the boards of the top 100 publicly listed companies were still overwhelmingly male and Pa¯ keha¯ . If that did not change, male directors could expect lobbying against their reelection at company annual meetings, Stubbs said.
The proportion of women increased from just under a quarter last year to 25.9 per cent, and 11 companies had no women directors at all.
‘‘At this rate it will still be more than a decade before boardroom equality is a reality,’’ McGregor said.
Eleven of the top 100 companies had no female directors, down from 20 in 2018. While 11 had no women directors, another 36 had only one, which raises concerns a ‘‘one and done’’ approach might exist in some companies.
Stubbs threatened directors on the boards of the largest 49 companies listed on the NZX with action to oppose their re-election unless they took action. ‘‘Diversity is critical to KiwiSaver returns,’’ he said.
‘‘Extensive research shows that if companies are not drawing from the deepest and widest talent pool, they will underperform.
‘‘Last year we said New Zealand companies have five years to fully diversify, which allows for normal board rotation. The clock is ticking.
‘‘Companies should be actively implementing their diversity policies, and be complete by 2022.
‘‘By then we [Simplicity] expect to be significant shareholders in all of New Zealand’s largest listed companies. If their governance is not fully diversified by then, as shareholders we will start making it happen.’’
It was not only the boardroom where women were underrepresented. A separate research project has found KiwiSaver funds were even more overwhelmingly controlled by men.
Each of the 265 KiwiSaver schemes has to publish quarterly updates on each of their funds, including naming the ‘‘key personnel’’ who contribute to running them. Just 151 of the 1202 named were women, said Barry Coates, founder of the Mindful Money KiwiSaver research website.
The predominance of men in fund management was likely to have been a contributing factor in how long it had taken KiwiSaver schemes to move to reflect ordinary New Zealanders’ moral and ethical concerns over the investments they hold, said Coates, as women were on average more concerned to invest responsibly than men.
Stubbs believed the relative lack of women in fund management was a contributory factor in the slow gender equality gains in NZX boardrooms.
There have long been concerns boardrooms were dominated by an ‘‘old boys’ network’’ but the researchers were concerned to see what could be the emergence of an ‘‘old girls’ network’’.
‘‘A marked feature of women’s representation in the top 100 was the number of women with multiple directorships, which is a feature of boardroom composition,’’ the researchers concluded.
‘‘Multiple directorships means decreased diversity and notions of a girls’ club to rival the traditional old boys’ network.’’
Companies were also asked for the ethnic makeup of their boards, said MacLennan. Only 44 replied, with most refusing to provide the requested information, citing privacy and human rights concerns.
But, MacLennan said, photos, biographies and names indicate the boards of the top 100 NZX companies remained overwhelmingly Pa¯ keha¯ .
‘‘Of Aotearoa’s population, 14.9 per cent is Ma¯ ori, 11.8 per cent is Asian and 7.4 per cent is Pasifika. The fact Ma¯ ori, Asian and Pasifika people are so completely under-represented on NZX’s top 100 boards is an indictment,’’ said MacLennan.
‘‘At this rate it will still be more than a decade before boardroom equality is a reality.’’
Dr Judy McGregor, pictured