NZX-listed companies lag behind ASX on ratio of women on boards

(BusinessDesk) NZX-listed companies lag behind their counterparts on the ASX when it comes to women's representation on boards, even as the market operator pushes for publicly traded companies to disclose gender diversity as part of their annual reporting.

Of the 574 NZX listed board positions, 11% are held by women, according to NZX data compiled by investment bank Goldman Sachs.

That is less than the 12.9% of women on companies in the S&P/ASX 200 Index, according to the 2011 Gender Diversity on Australian Boards survey. The Australian number has risen from 8.4% two years earlier.

In New Zealand, only 50 women sit on boards once those with multiple directorships are removed – one is on four boards, three sit on three and 11 serve two.

The average number of females per board is 0.8%, with an average board size of 6.7 people, the survey found.

"You need to think about merit" when looking at board composition, Goldman Sachs New Zealand chief executive Andrew Barclay told BusinessDesk. "Through the lens of what is going to create a better boardroom and organisation – think about reflecting the way your customers want to see you doing business."

Goldman found 63% of listed companies outside Auckland and Wellington have no female board members. Auckland is New Zealand's most diverse city and 61% of its boards have at least one female board member, followed by Wellington on 43%.

"Given the regional composition, it is apparent that the majority of the improvement would need to come from companies outside of Auckland and Wellington, although improvement could, of course, be made in these regions, too," Auckland-based Goldman says.

Goldman's survey found 45% of listed companies have no female board representation, with the percentage falling to 37% for companies in the benchmark NZX 50 Index.

Chorus, the telecommunications network company which demerged from Telecom last year, has the highest female board representation with three, followed by Michael Hill International with two.

Larger companies are more likely to have female directors, Goldman says. The probability of having a female board member rises by 0.3% for every $100 million of market capitalisation.

The Institute of Directors in New Zealand and dsd Consulting's 2012 Directors' Fees Report released on Wednesday highlighted the gender difference in pay between men and woman at board level. Non-executive women directors earned on average $24,500, while men bring home $39,553.

The discrepancy partly reflects the types of organisations where women are likely to sit on the board. They are three times more likely to sit on a not-for-profit board, while more than half hold directorships in organisations with revenue of less than $5 million a year.

In July, the NZX announced listed companies will be required to disclose the gender composition of their boards and senior management teams, provide information on their diversity policies and evaluate their performance in respect of the policy from December 31.

The stock exchange regulator is working with the Ministry of Women's Affairs and the 25 Percent Group, launched in June to implement the policy, with a target of 15% female board participation by 2015.

In May, the Financial Services Institute of Australasia and Bank of New Zealand launched the Women in Financial Services Forum after research showed that females across New Zealand and Australia perceive their career advancement as a low priority in the organisations they work for.

The NZX will publish final guidelines for its new gender disclosure rules this year.

Shares in the NZX are trading at $1.15 and have gained about 17% this year.

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I think this is just one symptom of a wider problem. In general, NZ lags behind Australia in making appointments to important positions (whether on boards, or in management,) on the basis of ability, rather than cronyism. By "ability", I mean the ability to do the actual job, rather than ability to be a prick, ability to manipulate others, or ability to shout loudly.

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11% vs 12.9% is hardly a significant difference, especially when the two numbers were almost certainly generated in different ways.

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The Norwegian experience is often quoted as a successful model in relation to getting women boards. However there is a significant difference between the societal and business expectations of women in Norway and that of the UK, USA, Australia or New Zealand. In a recent Spiegel Online article Kristin Skogen Lund gave a graphic example of how the business environment differs between countries.

She said she had a distinct advantage as a Norwegian women, there is one basic rule in her country: no meetings after 4pm, "those kinds of working hours are only possible when you have productive work, flat hierarchies and the corresponding fast decision making structures" adding that "

In Frankfurt or London I would certainly not be home before nine in a job like mine"

Another issue is the phenomenon called "golden skirts." Cathrine Seierstad, an economist who teaches at Queen Mary University in London said."golden skirts", on the other hand, is real. "Before the quota was introduced, no one had more than four board positions. Now the maximum number is eight to nine," This raises questions regarding the quality of input by female directors with such a heavy workload. It should be noted that the same concerns also apply t men who sit on 8/9 boards.

All of which raises the question, If countries are serious about bringing the best available talent into the board room, significant changes to many areas of board room and business practice will need to occur. One area is making it possible for more women to become members of the executive and that they are in turn given the opportunities to progress. Simply setting quotas and reporting requirements will not work.

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