COVID-19 updates 21 September

Some IoD courses and events may be affected by changes to alert levels. Read more

Future IoD

We are now working on transitioning to the new IoD Rules. Find out more

IMHO: Boardroom diversity benefits business

By Ziena Jalil
22 Jun 2021
read time
2 min to read
Ziena Jalil profile photo

OPINION: The role and composition of boards have been in the news a fair bit recently. There is a growing call for required disclosure of the diversity statistics of boards globally, including the US Nasdaq share market proposing new listing rules relating to board diversity.

Diversity was previously viewed as a social justice issue. It is now a commercial imperative too. Research shows diversity leads to better decision-making, overall board performance and more profitable organisations. But look around our boardrooms, and they look fairly homogenous on a range of levels.

Our public sector boards have achieved balance when it comes to gender diversity. However, there is a way to go for diversity beyond gender. For example, ethnic communities comprise 20 per cent of our population, but constitute only four per cent representation on state boards. And diversity on private sector boards remains woeful.

Our systems are set up in a way that keep some people out. We say we recruit on merit, but who you know is important too. And if you haven’t grown up in certain suburbs or gone to certain schools, that handicap starts from when you are a child.

Our current structures are trying to make a monocultural system of governance work in a country that has bicultural foundations and is now incredibly multicultural.

This manifests in many ways. Māori women, for example, may be underrepresented on public and private sector boards, but this isn’t due to a lack of governance skills. Think of the many women who lead significant iwi organisations and businesses, for example Ngāi Tahu and Ngāti Whātua Ōrākei.

Leadership looks and feels different from culture to culture – for example, aggression versus humility in style, individualist focus versus one that is collective in terms of decision-making approaches. These impact board dynamics.

We need to demystify governance, so it isn’t viewed as an exclusive role, with a predetermined path. Consider the Pacific community, where governance skills are commonly developed through the cultural structures within Pacific societies, and also through involvement in community and church groups. But many would not consider governance roles because it’s hard to be what you can’t see. And if you are one of the few that has made it, it can be incredibly lonely being the only person of colour at the table.

Diversity of skills needs to be a consideration too. Many boards are stacked with accountants and lawyers. These are important skills, but not the only skills boards need. Covid-19 has been a useful reminder of the range of skills needed, including strategy, stakeholder engagement, sustainability, digital savvy, futurists and international experience.

Another consideration is age. Governance is often thought of as what you do when you have climbed the executive ladder. It doesn’t need to be a retirement gig though! Young(er) people bring a fresh perspective, and useful insights as digital natives too.

"We need to demystify governance, so it isn’t viewed as an exclusive role."

Initiatives such as the Institute of Directors New Zealand Mentoring for Diversity programme, play an important role in building the next cohort of directors. The Superdiversity Institute’s recently announced 100 Diverse, Board-Ready Chairs and Directors will identify directors across a range of diversity dimensions.

Role models with diverse backgrounds, mentors who aren’t in the image of their mentee, sponsors who advocate for new talent, all help to build a broader base of governance professionals.

Board chairs are critical for the recruitment of diversity, and also in ensuring board culture is inclusive. A high-achieving Māori woman recalled to me her early experiences on boards. One of her board chairs sought input from the males at the table but would ignore her. The reporting metrics would have shown a Māori woman on that board, but her knowledge, skills and experience were underutilised.

Boards provide the checks and balances, and strategic direction for our organisations; accountable to shareholders and stakeholders alike. While it’s important we have diversity at the table, we need to ensure people feel empowered to contribute.

About the author

Ziena Jalil is an independent director, strategic consultant, and diversity, equity and inclusion advocate. She is a participant in the IoD’s Mentoring for Diversity programme.

The views expressed in this article do not reflect the position of the IoD unless explicitly stated.

Related content