Diversity builds better business

NZSX is working on a proposal that listed companies be required to report on the gender diversity of their boards and management.

It's not before time. Across the Tasman, what some commentators have dubbed the "Australian diversity tsunami" is already occurring.  A new energy and determination in business over there is ensuring that talented women aren't overlooked or their contribution wasted.

For example, Male Champions for Change is a year-old group of powerful men, among them expat Kiwis Sir  Ralph Norris and David Thodey, who aim to get women's representation in leadership onto the national business agenda.

Champions like these know there's no shortage of female talent in the pipeline; they understand the power of partnership between men and women. They have witnessed the benefits of boardroom diversity in productivity gains and business success and they are only too aware of the role of "groupthink" in the global financial crisis.

Lending huge impetus in Australia is, of course, the ASX Corporate Governance Council requirement that companies with 100 or more staff report on their progress against self-imposed gender objectives as set by their boards, the proportion of women throughout their organisations, and the mix of skills they seek in filling board vacancies.

If these companies don't, they must explain why not. The council, which is made up of representatives of 21 member companies to help improve corporate governance, is embracing diversity as a means to this end.  

Canny companies didn't wait for the official start date of January 2011 - they foresaw fierce competition for talented women, and acted smartly to position themselves as employers of choice.  And some are even asking suppliers what they, in turn, are doing to support diversity in their own organisations.

In the past year, the number of women on the ASX top 200 boards has reached 12.5%, up from 8.7% in 2010 - the highest ever.  The ASX rules, of course, have a direct impact on the 20-plus New Zealand companies that are dual-listed - and our stock exchange leaders will be acutely aware of this.

The proportion of women in pipeline senior-management roles in New Zealand's top 100 companies is higher than in their Australian equivalents - but given the speed with which corporate Australia is moving that could change.

Fletcher Building CEO Jonathan Ling, Coca-Cola Amatil managing director George Adams, EEO Trust chairman and Auckland Chamber of Commerce chief executive Michael Barnett, and BNZ director Susan Macken are among the leaders acting as mentors in the pilot of the EEO Trust Cross-Company Mentoring Programme, itself modelled on a successful FTSE 100 project.

The EEO Trust programme is designed to boost senior women managers' skills, knowledge and confidence so they can move into a board-level role in two to five years' time.  The programme emerged from our high-level 2009 forum A Place At The Table, where mentoring was seen as one of the most effective ways to prepare talented women for board service.

Greater gender diversity at senior management and board level isn't just a soft and fluffy nice-to-have. Research and experience has shown time and again that with the right leadership,diverse backgrounds and experiences builds better businesses. 

Published in National Business Review, 30 September 2011

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