Pressure mounts on private sector as public boards inch closer to gender equity

The private sector is lagging behind the state sector when it comes to women on boards. Photo/Getty Images.

The Government is putting pressure on the private sector to increase the number of women on boards as it breaks through another record for women in the state sector.

Latest figures show women made up 47.4 per cent of directors in the state sector in 2018 - up from 45.7 per cent in 2017 - and another step closer to the Government's target of 50 per cent by 2021.

But the listed company sector still pales in comparison with women making up just 22 per cent of directors on the stock exchange in 2018 - up from 19.7 per cent in the prior year.

Women's leadership groups have described the progress as glacial and embarrassing on a global scale with some 27 listed companies still having no women on their boards at all.

In the United States, 2.6 per cent of companies have no female directors; in Australia it is 4.4 per cent; and India only 6.6 per cent.

Julie Anne Genter, Minister for Women, said the Government was committed to having more women in leadership roles and hoped to inspire the private sector to lift its game.

"We're encouraging organisations across New Zealand to challenge current workplace cultures and support women into leadership roles, not just because that's the fair thing to do, but also because diversity helps organisations function more effectively."

Genter has met with stock exchange operator the NZX and Champions for Change - a group of more than 50 male and female business leaders who have committed to improving levels of diversity and inclusiveness in the business community.

She wants to use those contacts to reach out to the business with no women on their boards and convince them to engage and change.

Despite the slow progress in the private sector Genter ruled out introducing quotas.

"I think what is most important is that we use the tools most effective in the New Zealand setting. The evidence around quotas is mixed.

"It has worked in some areas but not others.

Instead Genter believes people respond better to targets.

"I think having that flexibility is really important."

Would she like public companies to set a target of 50 per cent?

"That has certainly been the subject of my discussions - what is the best form to set targets that would be motivating?"

She points to Australia as an example.

Julie Anne Genter, Minister for Women, wants the private sector to get more women on boards. Photo/Mark Mitchell.

In 2015 the Australian Institute of Company Directors (AICD) called for ASX200 companies to achieve 30 per cent women on boards by the end of 2018.

The companies failed, but got really close — women now make up 29.7 per cent of all ASX200 board positions, an increase of over 10 percentage points since the target was set.

In New Zealand the NZX50 or top 50 companies reached 27.3 per cent in 2018.

But it is the smaller companies that are lagging. Genter said she understood it could be difficult for those companies.

"But I think we need to see an increased level in the private sector - not just a few companies doing well but across the board."

While the NZX reports on diversity there is very little information on the private sector as a whole.

Genter said it did not plan to introduce reporting on that.

"I think the Government really needs to sort out its own performance first. Then we can have a conversation about how we can sort that."

Next year it will aim to have ethnicity data for state sector boards.

"This will give us better information about the ethnic makeup of our boards with a view to ensure diversity and representation of all New Zealanders."

But don't expect to see the same data for publicly listed companies any time soon.

An NZX spokeswoman said its issuers were required to report gender diversity metrics in their annual reports, and recommended to have a diversity policy which sets measurable objectives for achieving diversity, and must report the extent to which they have a diversity policy.

But the listing rules do not require ethnicity reporting.

"Issuers are encouraged to consider these matters as part of having a diversity policy...but it is ultimately up to issuers to determine their practices and reporting, and for shareholders to decide whether they are comfortable with an issuer's diversity practices."

Genter said the Government was on track to meet its 50 per cent target right now.

"But I don't I don't want us to rest on our laurels - we need to keep up the momentum."