Pansy Wong: It's not just the right thing for our women

Women's Affairs minister Pansy Wong.

Minister of Women's Affairs Pansy Wong on how to get more women on the boards of New Zealand companies.

Earlier this year, the Ministry of Women's Affairs teamed up with Business New Zealand and the Institute of Directors to launch the Women on Boards publication - a business case for more women representation on the boards of our top listed companies.

This concerted effort between government and the business sector was launched in May to lift the number of women in our boardrooms and highlighted the fact that just 8.6 per cent of the directors in our top 100 companies are women.

In this day and age this is a statistic that is, frankly, jaw-dropping.

When the Prime Minister launched the Women on Boards business case back in May, I was hoping that it would unleash a flood of discussion, debates and movements to lift the number of women in our private sector boardrooms.

However, it was more like a trickle to start with, but over the past six months we have seen a steady flow of debate and the signs for change are looking positive.

The launch of the Women on Boards initiative marked a turning point for the previously stagnated progress of ensuring that our top companies can gain the competitive edge that comes with having greater diversity in the boardroom.

The significance of having a joint approach between Government and Business is an expression of a joint commitment to act; it sends a powerful message that our women and our businesses are both missing out through low levels of women directors in the boardroom.

International research shows that companies with greater gender diversity in the boardroom tend to outperform all male boards across all measures.

The Catalyst Report, for example, looks at Fortune 500 companies in the United States and compares the top quartile of companies with women on boards with the bottom quartile. The report consistently finds that boardrooms with more women outperform those with few or no women.

The same report found that for companies in the top quartile, return on equity was 53 per cent higher, return on sales 42 per cent higher and return on invested capital 66 per cent higher.

Other research suggests this is because a diverse boardroom is likely to create a wider variety of ideas, experiences and solutions. Women bring to the boardroom different perspectives which will generate more discussion and new ways of doing business.

Since the launch of the Women on Boards business case, the Institute of Directors has run regional discussion panels inviting women and men to advocate for a transparent process of recruiting board members as part of their push to get more women into the boardroom.

The debate is happening within our business community and everywhere I go these days, people often want to talk to me about women in leadership and discuss ways of boosting our low numbers.

Currently, I am working with public company chairs and women directors to bridge the supply and demand mismatch arguments. I have also written to the chairs of our top 100 listed companies to put forward the business case for women.

I only got a couple of rebuffs, all of which were on the ground that companies only appoint directors on merit and not on gender. However, I find it intriguing that "appointment on merit" seems to be mutually exclusive to the subject of appointing women directors.

Others agreed that something has to change, but have put the challenge into the too-hard basket, saying there aren't enough board-ready women.

But it seems to me that the difficult part of lifting women representation in the boardroom is changing the attitude that a woman director can't be appointed on merit alone.

Because women are able, willing and eager to serve in the boardroom and by underutilising their skills our economy is missing out.

If the hardest part is finding women, there are plenty of networks out there that companies can tap into and there are plenty of recruitment agencies that have highly-qualified women in their books that would be perfect for any number of positions.

By matching these women up with the available positions we can easily boost our low number of women representation in the boardroom to the benefit of our top companies, because this isn't just about doing the right thing for women - it's about doing the bright thing for our economy.

As someone who has been honoured as a Fellow of the Institute of Accountants, I have done the numbers, which show that this is something that should never have been put in the too hard basket.

Currently there are 624 positions in our top 100 listed companies and 8.6 per cent of those are held by women representing 54 directorships. For us to get to 10 per cent women representation, we only need eight more women in our boardrooms; for us to then get to 15 per cent we will need 32 more women.

With 100 women serving in our boardrooms, we would have 16 per cent representation.

How hard is that?