Forget girl power, New Zealand’s lack of female representation at the highest level of business is stunting performance and shows a lack of professionalism in the boardrooms of some of the country’s key economic drivers.
 
Women’s Affairs minister Pansy Wong says the launch of the Women On Boards business case is an example of government and business working together to boost gender diversity in Kiwi boardrooms.

New Zealand women make up 46% of the workforce, but just 8.65% of directorships on the NZX top 100.

Rather than being a heavy-handed dose of political correctness, at the most basic level New Zealand’s companies are halving the pool from which to draw applicants from.

International research has shown a correlation between women in leadership roles and business performance.

For companies in the top 25% (of highest women’s representation on the board) the return on equity was 53% higher; return on sales 42% higher; and return on invested capital is 66% higher than companies in the bottom quartile.

It’s a no-brainer that means billions of dollars of added value is going down the gurgler in New Zealand, as well as handicapping the nation in its goal to close the productivity gap and push the country back in to the upper echelons of the OECD rankings.

“New Zealand was the first country where women were able to vote and we now have the opportunity to lead the way in utilising the skills and talents of our women in the boardroom,” Mrs Wong says.

This doesn't mean a fully female board will always out perform a male one, but the key is critical mass. Having three female members on a board of ten is a good start for bouncing around fresh ideas.

The fact that women drive more than 80% of consumer decisions in households indicates the depth of customer understanding that women can bring to commercial boards.

Institute of Directors’ chief executive Nicki Crauford says companies are missing out on access to a greater range of skills and insights.
 
“Women’s skill sets might generally differ somewhat from men’s, and that is a source of competitive advantage," she says.

The Human Rights Commissions 2008 report reveals that sixty of the top 100 companies on the New Zealand Stock Exchange have no women on their boards.

There are only 45 women on the boards of the top 100 NZX companies total, and 54 of the 624 board directorships available.

The figures are even worse below the top 100 and in the two other New Zealand Exchange markets.

Women make up just 5.73% of directors of companies listed on the New Zealand Debt Market, and just 5.07% on the New Zealand Alternative Market where women's representation has slumped dramatically from 16.39% in 2004.

By way of international comparison, Norway has women on 37% of listed companies by legislation, in the US women hold 14.8% Fortune 500 board seats (2007 figures), 11% in the UK on the FTSE 100 (2007 figures) and Australia has 8.7% on the ASX 200 (2006 figures).

New Zealand Shareholders Association chairman Bruce Shepherd has long railed against the lack of diversity in the directorship ranks, which operates as an old boys network that struggles to bring new ideas to the table.

New Zealand is already a small market to draw from, especially when most of our high-end business leaders move on to the ASX or farther afield.

This has led to a culture of shoulder tapping and closed buddy networks leaving a small puddle, rather than a pool, to draw directors from.

The government’s new plan is to shatter the self-perpetuating cycle by educating business leaders to think in the long to medium term, by offering clearer and more substantial career paths for women, using role models and mentors to foster talent.