5. Set targets and measure progress

Ultimately, what gets measured gets done. In corporate New Zealand, employers need to understand their employee pipeline. That includes diversity at all stages in the hiring process, promotion rates, performance ratings and allocation of stretch and high-visibility assignments, compensation and reasons for exit at all levels.

Targets and disclosure policies can and do make a difference. In New Zealand there has been some improvement at a macro level on gender diversity. Women make up 43% of people on state sector boards which is getting close to the government’s 45% target. Women made up 17% of directors on NZX listed companies in 2015. This is up from 12% in 2013, when NZX introduced requirements⁵ for issuers listed on the main board to report on the gender breakdown of directors and officers in their annual reports.

However, this is still slow progress and the proportion of women on NZX listed companies lags behind other countries.

At the entity level, boards need to lead the way in changing culture and making diversity a priority. This includes setting diversity objectives aligned to board review findings, and ensuring the board has the skills and experience it needs now and for the future.

It also includes holding management to account for leading and embedding diversity in the organisation.

Increasing board diversity should not be about compliance, but about improving board effectiveness. One woman or one Māori member on the board does not mean there is board diversity. There needs to be a critical mass for diversity of thought and perspective to flourish. For example 30% representation is regarded as a level at which minority voices can be heard.

Setting targets and measuring progress will provide boards with the information they need to track progress and achieve diversity goals. Reporting on progress in an open and meaningful way that goes beyond compliance, is simply good governance.

Tips for setting targets and measuring progress:

• Develop and implement diversity policies and establish measurable diversity objectives for the board and the organisation
• Tailor targets to the board’s needs and strategic objectives
• Ensure there is sufficient and transparent disclosure about board diversity processes, eg board evaluation and appointments, and progress in achieving objectives
• Consider setting targets for short lists, such as a gender balance of between 30% and 50%
• Hold management to account for leading and embedding diversity in the organisation

A final word