Census of women on boards: Should only a small gain be celebrated?

AUT professor Judy McGregor says mandated quotas are still needed

A "golden skirts club" has joined the old boys' network on boards, says Judy McGregor.

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The proportion of women on the boards of the top 100 companies listed on the New Zealand Stock Exchange has finally climbed above 20% to 22.17% in 2017, according to the New Zealand Census of Women on Boards 2017.

Of the total 618 board members of the top 100 companies, 137 directorships were held by women but the number of board chairwomen has remained the same over the past five years at seven and the number of female chief executives has not moved beyond three.

There are still 25 of the top 100 companies that have no women on their boards despite decades of concerns about women’s representation and the value that brings.

One of the report’s authors, AUT professor Judy McGregor, who was also the country’s first Equal Opportunities Commissioner, says she’s slightly relieved after a decade of monitoring this issue that the number has finally moved over 20% but says such a small gain shouldn’t really be celebrated.

“There is some evidence of a slightly faster momentum because we now have a new element appearing in the gender representation on boards – the golden skirts club on boards of some women with more than two to three board appointments. So that’s a positive movement but 20% is still dire,” she says.

At this rate of progress, it will take another 13 years to 2030 to close the gender gap in governance at a time of women’s increasing labour force participation and buying power.

The number of companies with at least one women on the board increased to 75 from 55 during the five years to 2017. Those having just one woman director now number 32, while those with two women on the board is now 27, and those with three or more has risen to 13. There are only three companies – Tourism Holdings, AMP and Genesis Energy – that have four women on boards.

Some six of the top-100 companies have a gender equal board – Contact Energy, Kiwi Property, Summerset Group, Tourism Holdings, Steel & Tube, and Kingfish.  Genesis is the only one to have women as both chairwoman and deputy chairwoman. The theory suggests that to enhance the likelihood of women’s voices being heard in the boardroom, there should be at least three women on the board, the report says.

Ms McGregor says there needs to be stronger government leadership on the matter and she is still a strong proponent of introducing government-mandated quotas or organised consumer/shareholder activism despite the progress made. The merit argument has been used time and time again, particularly by companies with no women on the board, she says.

“Those countries that have quotas a) the sky hasn’t fallen in and b) the company has been rewarded by a wealth of talent that women can bring to boards,” she says. “It’s inexcusable in 2017 to see companies that can’t find appropriate and well-qualified women to sit around the board table.”

The NZX recently toughened its stance on gender diversity to match what happens in Australia with all listed companies required to have a gender diversity policy or explain why not.  

The report names 18 companies that had no women on their boards in 2012 and now have at least one female director: Fisher & Paykel Healthcare, Port of Tauranga, Xero, Mainfreight, Sky Network, A2 Milk, Infratil, Trustpower, Metlifecare, Heartland Bank, Property for Industry, Tourism Holdings, Green Cross Health, Hellaby Holdings, Comvita, NZ Oil & Gas, South Port NZ, and NPT.

The report singles out Mainfreight for praise. The global transport company had no women directors until this year and now has two, which better reflects the composition of its workforce where women make up one-third of staff.

“What we don’t want is an old girls' network to just replace an old boys' network. We want a more diverse boardroom that adds value to profits but is also conscious of workforce issues and the other complex moral and ethical environment in which companies are now operating,” Ms McGregor says.

The 25 companies without female representation are: Airwork Holdings, Argosy Property, CBL Corporation, CDL Investments, The Colonial Motor Company, Gentrack, Global Bond Trust, Metro Performance Glass, Millennium & Copthorne, NZ Bond Trust, NZ Cash Trust, NZ King Salmon Investments, NZ Top 50 Fund, Orion Health Group, Pacific Edge, PGG Wrightson, Pushpay, Rubicon, Scale Corporation, Scott Technology, Tegel Group, The Europe Trust, The US 500 Trust, Tower, and Turners.

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“AUT professor Judy McGregor says mandated quotas are still needed”

Nonsense. When was the right person for the job superseded by any old person. Has the Professor thought a) the man in this instance is better qualified? b) there is no woman with the qualification needed for that board? Or do the make-up of the boards become gender equal first and worry about the company and its business second? Look around you, Professor -- when has selection on race, colour. sex ever worked? It’s a recipe for disaster, but then, Professor, it's not your money, or your job, is it? You're safe in your little academic haven, aren’t you?

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Board selection is hardly about the best person - male or female - its about who you know. Its about playing the game - performance is irrelevant - at least in listed companies and government agencies.

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Now that's the reality of the situation. ie John Keys latest career move, straight onto a board.

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I'd agree there's likely a large component of this.

When auditions for major orchestras changed to blind auditions (the candidate played behind a screen), the number of female players admitted to the world's top orchestras increased significantly. Similarly, much research has been done around distributing identical CVs with only a name differing - a clearly male or female name. Uptake rates differed significantly.

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There is the counter-argument put forward by Vaughan Davis and other commentators, that a board should reflect a company's customers -- the better to understand them. In most cases, that includes a lot of women. 

And FYI Grant Walker put the affirmative action vs best available talent question to Judy McGregor during her NBR Radio interview. Listen here.

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Let her have her five minutes of fame. She'll be gone soon.

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Quotas avoid the unconscious bias that occurs when selecting boards. Anyone who thinks that people getting boards through quotas don't merit the appointment, never think that the existing board may not merit the appointment but got there because of unconscious bias and privilege.

As has been stated many times: the mediocre leader has the most to fear from diversity. They will be supplanted by excellent candidates who weren't considered because they 'weren't like us'.

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Unconscious? Surely subconscious.

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The only form of diversity that matters - the diversity of ideas and experiences but It's much easier instead to look at a lineup of candidates and assume that anyone who isn't white, or who isn't male automatically has different ideas or experience. In a way, it's kind of the most presumptive concept out there - just because someone looks different, they must act and think differently.

To the diversity obsessed it's all about what's on the outside, not what's on the inside ... because it's much easier to measure appearances than thoughts and experiences!

As you say, it's now all about the creation of a diversity industry and associated gravy train. It used to be said that "those who can't do, teach." I would argue now that "those who can't do, get paid far too much to harp on about diversity".

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Some of the female directors I have worked with and for are probably more "male" than most of the men, so bring no diversity to the board.

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This is 100% right

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Surely a better measure is that board compositions should reflect the demographics of the owners of the business? There is nothing quite like putting your money where you mouth is

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The only things that matter to those who provide the company with capital are (i) how good a job is it doing and (ii) could it do better? The gender of board directors is of no moment, unless this somehow impacts (i) or (ii). And there's no credible evidence that it does (despite many uninformed claims to the contrary).

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A report on diversity and we dress the 5 little women in the graph up to look like ... yes you heard it here first... men! Seriously? Talk about unconscious bias NBR!

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Sorry how should they have been dressed exactly?

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So much lies in the definition of 'suitably qualified ' . As long as the men who define governance in NZ are empowered by their own group think that insufficient ''suitably qualified " women exist , ( read- don't rock the boat and same background as the lads ) in NZ then this arrogant inbalance continues. Only shareholders can really change that . And women who refuse to believe the rhetoric. Their boards would then not only better reflect the customers they serve , but benefit from the emotional intelligence in people leadership many women ( and some men) can bring . Well lead and empowered CEOS and employees have a positive impact on profits, not the other way around . If you talk to many women in governance celebrating dissent for better collaborative outcomes is unfortunately not a feature of some NZ boards , masculine defensive behaviour instead prevailing.
There will be as many poor female leaders as male I am sure , but it is incredible that anyone can claim the wisdom needed for effective governance can only be found in the male half of NZ's population! The capable women exist . Take the flak, and do it anyway , ladies.

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"masculine defensive behavior"? Wow is that really a thing? I don't think either (or is it any these days?) gender has a mortgage over that character trait. And that's really the point, its not about the gender but about whether there is real diversity and tolerance of dissent.

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Every individual should have equal opportunity.

Quotas, like prohibition, et al, are a gulag.

These two statements don't contradict one another.

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Quotas are the ultimate admission of inferiority in every sense.

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I believe in meritocracy as the best way to move a company forward, not a gender-based theocracy. The problem we have in NZ though is that there is far too little meritocracy being practiced by Boards, company chairman and senior management in their appointments. Rather we have a lot of butt covering and a 'lets keep the smart guy/girl out so we don't get shown up and loose our baubles' mindset going on.

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A gain in anything should be celebrated, it demonstrates a will and that it is possible, suggesting ncreased will, results in further gains.

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Perhaps we can ask how we can contribute to each other and the purpose we're put in the position to undertake; to collaborate, to learn from each other and to strengthen and grow together, men and women? Diversity is the new buzz word it seems and everyone appears to want to get on that bandwagon, when diversity should just BE!

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As a female shareholder all I care about is the performance of the company I have my money invested in and the returns.

I think the NZX (and the ASX) should be more concerned with some of the crap they've allowed floated in the past years than if the person on the Board uses the male or female toilets.

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As a male shareholder I would agree with you 100%.

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