TABLED Board Women are Hard to Find

Women’s participation on the boards of New Zealand’s top companies has shown little progress in the past decade and now ranks at “dismal” five percent. Of companies listed on the NZX, 72 percent have no women directors at all.
The figures are revealed by the just released Census of Women’s Participation in Governance and Professional Life and show us lagging well behind the United States (where 13.6 percent of Fortune 500 company directorships are held by women), Australia (8.4 percent) and the United Kingdom (7.2 percent).
The census, carried out by the Human Rights Commission and Massey University’s Centre for Women and Leadership, is first and the results were both surprise and disappointment for EEO Commissioner Judy McGregor.
“I knew the figures would be low because of previous research work I’d done in this area. In 1995 I found 3.86 percent [of women directors] in top companies and imagined decade later it would be much higher. I’m disappointed more than surprised – five percent is dismal. At least the US has reached double figures.”
She doesn’t think the problem is simply lack of good female candidates and points to the progress made by Crown companies which the census shows have 35 percent female representation on boards.
“And these companies are more difficult to run because they have to take into account social as well as commercial objectives. So I don’t subscribe to the view that there are too few women with sufficient experience. I think the problem is the horizon of current boards when they look for replacement directors.
“Boards are so concerned with fit and maintaining particular board dynamic that they don’t look beyond people they already know.”
The new NZAX (Alternative Exchange) can, on the other hand, boast 16.4 percent rate (of women directors).
“Changes in board composition happen relatively slowly and prevailing board cultures are probably resistant to change. The newer listed companies seem to have broader horizons. Perhaps it is because they are new, smaller, innovative, and less conservative.”
The situation is similar in Australia, as the census points out.
“Symons (2004) reporting on the Australian experience has noted newly listed companies that have gone public since 2000 are more likely to have female board representation.”
Of the 12 NZAX companies included in the census, Oyster Bay Marlborough Vineyards and RetailX both had two women directors which represented two-thirds of the entire RetailX board.
The NZX figures were derived from 89 companies with total of 29 female and 546 male directors. The company with the highest female participation rate (33 percent) was the Lyttelton Port Company which was one of four companies including Telecom, Independent News and Wrightsons, that had two women directors.
By comparison, several of the Crown companies as reviewed by CCMAU (Crown Company Monitoring Advisory Unit) had three or even four female directors.
Highest percentages in the state sector included The Public Trust (five out of eight or 62.5 percent female directors), Quotable Value NZ (60 percent female directors ), Radio NZ (57.1 percent), Crop and Food Research (57.1 percent), Dunedin and Invercargill Airports (both 50 percent), and Landcare Research (50 percent).
These higher levels are achieved through government direction, says McGregor.
“Successive New Zealand governments have committed Crown companies to increase female representation.”
Former Prime Minister Jenny Shipley promised to lift women’s representation on Crown company boards to 50 percent but this target wasn’t reached and the target has since been pushed out to 2010, says McGregor.
The census says the change is indicative of slippage in New Zealand’s commitment to improving women’s participation in governance and professional life – despite appearances to the contrary. Yes, small number of women now hold significant leadership roles including the Prime Minister, Governor General, and Chief Justice but, their high profile tends to obscure the overall status of women.
The perception, says McGregor, is that we’ve done OK and don’t need to keep up the guard. The reality the census highlights is that although the participation rate of women in the workforce is now nearly 60 percent this is neither reflected at governance levels nor in legal partnerships (14.12 percent), or academia (15.82 percent are university professors or associate professors).
The rationale for the census is to create an objective and transparent record of progress. It was undertaken on the basis that what gets counted gets done. It notes that while there are anecdotal reports of women’s progress in governance and professional life, there has so far been no systematic benchmark.
It also points out that progress here remains slow even within organisations that regard themselves as being at the cutting edge.
“For example, the front page of the New Zealand Institute of Management Annual Report 2003 titled New Zealand Management World Class by 2008, contained photographs of the nine-man national board and featured inside the five-man executive team.”
It was, says McGregor, very visual representation of the problem the census highlights.
“The thing about the census is that people are surprised and sensitised by it. You only need to look to see the problem. It’s not the sisterhood beating us up; just an objective, transparent account of how things are.”
Hopefully it will get people thinking and perhaps making wider sweep for board membership.
“We know that boards aren’t intended to be democracies but surely diversity in terms of women’s participation is sound corporate strategy.”
It’s not case of being PC, says McGregor. There are compelling social justice and business cases for women’s representation in governance and senior professional positions. The business case for women in the boardroom suggests that women bring to boards important insights into products and markets which increase competitive advantage.
“If you look at boards where women are better represented such as Telecom these are big, strongly performing companies. So there’s evidence that female participation doesn’t mean board is less productive in its workings or that company is less profitable in its outcomes. And there is plenty of evidence to suggest they add value.”
As to how things might change, McGregor emphasises there is absolutely no suggestion of quotas.
“I don’t subscribe to them at all. But I think these results will be surprise to many companies and will perhaps provoke some thought about director selection.”