The Institute of Directors urges boards to get on board with diversity

The Institute of Directors (IoD) urges listed companies to set gender diversity targets to improve the concerning NZX gender statistics – unchanged from 2015.

The NZX reported only 17% of board members were women in 2016, unchanged in 2015. New Zealand lags internationally with UK FTSE100 at 27% up from 26% in 2015, Australia’s ASX200 at 24.5% up from 21.5% and the US S&P100 at 23.3% up from 22.3% in 2015.

The IoD says boards need to lift their game as board diversity is critical to maintaining a competitive and vibrant economy. The challenges of disruption and the modern world call for modern and diverse boardrooms.

“The IoD has long held the view that diversity of thought and perspective in the boardroom improves business performance and innovation,” IoD Manager Governance Leadership Centre, Felicity Caird says. “The dividend that diversity pays is bringing different perspectives and more robust decision-making, effective risk management and better company performance.”

The IoD urges listed boards to take active steps to achieve 30-50% of women directors. To help encourage diversity, the IoD has a number of programmes and initiatives to support boards including:

Getting on Board with diversity – a practical guide

Released in June 2016 Getting on board with diversity, offers five practical steps to help boards ensure diversity is about attracting and retaining diverse talent in governance and highlights some of the classic challenges boards can face on the way to greater diversity. About 1,500 people have viewed the resource on the IoD website, while copies were sent to all IoD members (currently at 8,000).

Future Directors programme

Founded by Michael Stiassny, Des Hunt and Sir Stephen Tindall the programme helps to develop the next generation of directors by providing them with the opportunity to gain board experience by sitting at the board table of a New Zealand company for a year. There are 410 people currently listed on the Future Directors database, with 16 private sector companies have, had or are about to appoint a Future Director to their board. In 2016 the programme was expanded into the State Sector. 64% of appointments so far have been women.

Director Search database

The IoD maintains New Zealand’s largest database of independent directors. We help boards recruit the best people by matching the right skills and experience to a board. Currently of the directors registered 29% are women, and the IoD would encourage more to register, and companies to use the service.

Mentoring For Diversity

Established in 2011, the programme in its first three years linked 74 high-performing female directors with experienced chairman and senior directors for mentoring. In 2015 the programme expanded to reflect diversity in a wider sense including ethnicity, age, skill and experience in relation to gender. So far 111 people have been through the programme.

The IoD believes encouraging business to buy in to diversity is the best approach

“We must also create a diversity pipeline at senior management level to support development into governance roles,” Ms Caird says. “It is not realistic to ask the question why aren’t there more women on boards without asking where the female chief executives and senior managers are being developed. Nor can we pretend that without the willingness of senior board chairs we will have meaningful change”

“We encourage companies to continue their diversity journey as we want the ultimate aim to achieve diversity of thought around the board tables of New Zealand. This means having different people working cohesively, exploring the same issues and bringing richness and variety to the board table.”

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