Diversity of boards critical - Media release

The Institute of Directors (IoD) reaffirmed that diversity of thought and perspective in the boardroom is critical to organisational success in today’s environment.

This after Minister for Women, the Hon Julie Anne Genter, released the latest Gender Stocktake of State Sector Boards and Committees which shows a record level of 47.4% of directors in state sector boards are women. The new figure is an increase from 45.7% in 2017.

“We know diversity is important to boards, 68% of directors report diversity was a key consideration in making appointments to their board according to our 2018 Director Sentiment Survey,” says IoD Chief Executive Kirsten Patterson.

Major institutional investors (eg. Blackrock) and stock exchanges, including NZX and ASX, expect and support gender diversity on boards and reference this in their corporate governance codes.

Diversity and competence

However, Ms Patterson said while diversity on a board is vital, it should always be approached through the lens of demonstrated competence.

“Embracing diversity does not mean compromising on skills, experience and professional qualifications of board members,” says Ms Patterson.

“It’s about appointing people on merit who also bring diversity of thought and perspective to enhance board decision making which in turn helps drive better outcomes and long-term success for the organisation,” adds Ms Patterson.

Value of diversity

“The value of diversity on boards is about having different perspectives through a balance of expertise, knowledge, gender, ethnicity, age and background,” says Ms Patterson. “We encourage boards to think about how they can improve diversity for their organisation, and get the best mix of talent, diverse thinking and capability,” she adds.

Advancing diversity

The IoD has been at the forefront of advancing diversity and inclusion in governance and has a range of programmes and initiatives aimed at increasing diversity of thought and capability in the boardroom.

It recently refreshed its Getting on board with diversity guide — a resource for boards on how to take an active, conscious and thoughtful approach to support diversity in their boardroom and organisation.

Since 2012, the IoD has run a Mentoring for Diversity programme. Initially focused on women, the programme was expanded in 2015 to consider mentees in terms of ethnicity, age, skillset and background, in addition to just gender. The programme targets top performers and pairs them with a leading New Zealand director or chair for a 12-month period. Over 170 mentees have participated in this programme, almost 90% of which are women.

“We also run a Future Directors programme which provides opportunity for aspiring and up-and-coming directors to gain firsthand board experience by participating on a board of a New Zealand organisation for a year,” says Ms Patterson. Fifty-seven (57) directors have been appointed though this programme since its inception in 2012, 47 of which are women.

The IoD is New Zealand’s pre-eminent organisation for directors dedicated to driving excellence and high standards in governance. Its more than 9,000 members are drawn from listed companies, large private organisations, state and public sector entities, small and medium enterprises, not-for-profit organisations and charities.

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