As the global demand for talent intensifies and technology reshapes the business landscape, it is critical that we attract, retain and develop both the best and the most diverse talent in senior management and on our boards. Read further the Oct/Nov 14 boardroom article on diversity: missing the beat.
Organisational diversity is a broad term and can refer to a mix of gender, skills, thought or culture to name a few. It is widely accepted that diversity has a positive impact upon decision making processes. But what does diversity mean for the director? And how can we improve diversity in the boardroom?
Whether in difficult or prosperous economic times, every business in New Zealand looks for a competitive edge. An outstanding competitive advantage is there for the taking – the talents and leadership abilities of women at board level. This is the conclusion of the Ministry of Women’s Affairs (MWA), who have produced the report, Women on Boards, with the support of Business New Zealand and the Institute of Directors in New Zealand. The evidence shows that women directors can help companies gain competitive advantage and increase profits, and that companies that have women on their boards outperform those that do not.
The IoD established the Mentoring for Diversity programme to link experienced women directors (mentees) with chairmen and senior directors (mentors) from NZX and large company boards. The aim of the programme is to connect board-ready women with a better understanding of how large company boards work and to assist in the process of seeking appointment.
It is worth noting that the NZX requires listed entities to disclose a quantitative breakdown, as to the gender composition of the Issuer’s Directors and Officers, as per listing rule 10.4.5 (j).
The MWA have also more recently produced the report Inspiring Action which provides an excellent summary of relevant research and action plans to assist organisations in attracting and retaining talented women.
A board composed of a variety of skills, knowledge, expertise, experience, personality, communication styles, and interpersonal skills may foster a broader range of perspectives, insights, and views in relation to issues affecting the organisation. This policy paper, composed by the Global Network of Director Institutes (GNDI), describes a global perspective in relation to board diversity. It explains the rationale, meaning and significance of board diversity, and outlines possible ways to improve board diversity.
There is an argument that there is a strong message sent from the board when diversity is evident in director appointments. The Institute of Business Ethics briefing, Business Ethics and Board Diversity, explores how boards should be approaching boardroom diversity in relation to ethical business practice and the principle of equal opportunity.
The UK Government pledged in the Coalition Government Agreement to “look to promote gender equality on the boards of listed companies”. The Business Minister and Lynne Featherstone, the Minister for Women, invited Lord Davies of Abersoch to undertake a review, exploring barriers preventing more women reaching the boardroom and to make recommendations regarding what government and business could do to increase the proportion of women on corporate boards.
Read the Initial 2011 report here
Read the 2014 progress report here
There is an ancillary document which has followed these reports, detailing a voluntary Code of Practice for Executive Search Firms.
Looking beyond the boardroom, Credit Suisse has identified and mapped 28,000 senior managers at over 3,000 companies in the Credit Suisse Gender 3000. This has enabled analysis of the impact of diversity at a day-to-day operational level which expands upon an important body of work regarding the impact of board diversity on company performance.
Catalyst is a non-profit organisation with offices in the US, Canada, Europe and India. Their mission is “to expand opportunities for women in business.” Dedicated to creating more inclusive workplaces, Catalyst offers a suite of research and useful tools centred on diversity.
Women looking for board positions should consider the Ministry of Women’s Affairs website regarding nominations to State Sector Boards and committees.