The Institute of Directors (IoD) is urging NZX listed companies to set gender diversity targets to improve the sobering board gender statistics.
Seventy seven per cent of the top 122 NZX companies have less than 30 per cent of women directors on their boards, and 39 having no women at all on their boards, according to IoD."That is simply not good enough, that needs to change," says Simon Arcus, IoD chief executive.
The IoD is calling on listed boards to take active steps to achieve membership of 30 to 50 per cent of women directors."We need boards that reflect New Zealand's diversity, the global reach that many of our businesses have and also that of shareholder expectations," says Arcus.
One of the things we see around the world, and which we will see more in New Zealand, is shareholder activism about diversity, adds Arcus.
Beyond gender diversity
"We believe there are plenty of people out there from different and diverse backgrounds that can join boards and add value," says Arcus, who issued the call during the launch of IoD's guide on Getting on board with diversity.In an interview with CIO New Zealand, Arcus says diversity also covers "ethnicity, Maori whakapapa, LGBT ( lesbian, gay, bisexual, and transgender) affinity, age, race, religion."
He says board diversity also means recruiting for members from the technology and cyber points of view.Most businesses are realising the digital implications to their business, or are fully realising the whole business model is probably digital in the future, he says.
"If you're going to make a change, that has to be driven at a strategy level which is what the board is responsible for. You have to have people who understand the cyber and digital world."
"They don't have to be people who can write code or build a website," explains Arcus."They need to be people who can ask questions about the digital future of the organisation and get answers that they are satisfied with."He says the challenge for diversity is two-fold.
One is the cultural change in increasing an inclusive culture and recognising unconscious bias.The other is taking steps in making a diversity policy for the organisation, reviewing the board's composition and identifying and appointing diverse talent.Boards need to lift their game as board diversity is critical to maintaining a competitive and vibrant economy, says Arcus.
"We understand that change takes time. Boards should be setting their own diversity policies, appropriate targets and declare this in their annual reports.
"Timeframes and initiatives should be authentic and set accountability, but also take business needs into consideration."
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