Companies to be required to showdiversity

The NZX will make companies listed on the New Zealand stock exchange report on gender diversity at executive management and board level from next year. It follows two months of consultation.

The new rule, subject to Financial Markets Authority approval, will apply to annual reports for all NZX main board listed issuers with a balance date on or after December 31.

In line with its Australian counterpart, it will require companies to provide a breakdown of the gender composition of directors and officers and compare that to the year before, once that is relevant.

It will also evaluate the performance of their formal diversity policy, if they have one, but stops short of requiring firms to have a formal policy.

‘‘It’s important we give our listed companies the flexibility to make their own decisions about whether a formal diversity policy is a priority for them at this stage,’’ NZX chief executive Tim Bennett said.

‘‘Over time, we would like to see more listed companies taking the opportunity to report on diversity as a contributor to investing decisions made by shareholders.’’

Following submissions, the NZX modified its proposed rule, dropping a requirement for issuers to break down gender composition on subsidiary boards because many companies said it would be impractical and unduly onerous.

And the term senior management team was watered down to officer, which encompasses the smaller executive team such as the chief executive, chief financial officer and chief information officer.

The NZX said there was credible research suggesting diversity, and gender diversity in particular, at board and executive management level contributed to improved company performance.

But Women’s Affairs Ministry figures show only 9.3 per cent of directors on the boards of New Zealand’s top 100 listed companies are women and the number of women in management roles is only 21 per cent.

Women’s participation in running and governing Australian corporates has risen markedly since it introduced diversity reporting two years ago. In the past year, a third of all new board appointments to ASX200 companies were women, compared with just 5 per cent in 2009.

The chairwoman of the Global Women Organisation, Jenny Shipley, said recently her group did not support quotas, but did expect change.

The 25 per cent Group, comprising business leaders in the public and private sectors, was launched last month with a target of increasing female participation on New Zealand boards to 25 per cent by 2015.

All 12 founding members say they will improve diversity in their own companies and encourage others.