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IoD welcomes increasing diversity of NZX directors, challenges boards to also prioritise inclusion

IoD statement on the latest NZX diversity statistics

type
Media release
author
By Institute of Directors
date
5 Feb 2020
  • Diversity is an important priority not just in terms of gender but in achieving a balance of ethnicity, age, background and experience
  • Diversity should always be approached through a lens of competence
  • A winning board strategy is to harness the value of diversity through inclusion.

The Institute of Directors (IoD) is pleased to see the percentage of female directorships on S&P/NZX50 boards tracking in the right direction to help boards build much-needed diversity.

The latest NZX diversity statistics released today reveals 29% of S&P/NZX50 directorships are female, up from 27.6 % in 2018 and on track to meet the 2020 target of 30% recommended by Global Women.

“This is encouraging and we hope to see this continue,” says IoD CEO Kirsten Patterson.  “We also encourage organisations to take a much broader view of diversity to include age, ethnicity, LGBTQI, culture, disability, background and experience.

The 2019 NZX figures show 100% of S&P/NZX50 issuers now have a diversity policy in place, from 93.9% in 2018.

“Of course, diversity should always be approached through the lens of competence, that’s a given. Embracing diversity does not mean compromising on skills, experience or professional qualifications,” Patterson adds.

Inclusion

“While there is still much work to do in the diversity space, we encourage boards to take active steps to also prioritise inclusion,” says Patterson.

“Often, diversity and inclusion are lumped together and assumed to be the same thing. Diversity is being invited to the table, inclusion is about unlocking the power of diversity. It’s essential that we represent a range of thought around the board table – but more importantly we need to truly challenge ourselves about how we harness a wide variety of insight, life experiences, skills and perspectives and use them to better guide our organisations to success.”

The IoD CEO said while it’s great to see organisations making positive steps around ensuring people with diverse backgrounds are being invited to the board table, she said “we also need to make sure those directors are encouraged to speak up and really listened to when they do get that seat on board table."

“Without inclusion, the benefits of having diversity of thought around the table will not be realised. The ideas that can foster innovation and lead to positive business outcomes won’t surface if boards do not create a culture of inclusion.”

“Diversity and inclusion are really measures of credibility. As organisations work to achieve board diversity, they should simultaneously ensure there is meaningful engagement so they don’t fall into the trap of tokenism. And at the IoD, we will continue to find ways to help boards achieve this.

Diversity benefits

According to the 2019 KPMG/WCD Thought Leadership Commission report on diversity, a sampling of studies published in the last few years show that:

  • diverse organisations are more successful at retaining talent
  • diverse teams are critical for innovation
  • mixed-gender boards have fewer instances of fraud
  • boardroom diversity strengthens corporate social responsibility performance

IoD programmes

The IoD has the Mentoring for Diversity and Future Directors programmes which both aim to help build diversity in New Zealand boardrooms. It has published the guide Getting on board with diversity which encourages boards to take an active and conscious approach in supporting diversity in their boardroom and organisation.

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