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Home / New Zealand

Breaking down the boardroom barriers

19 Nov, 2002 07:18 AM5 mins to read

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By VICKI JAYNE

Following the collapse of major companies like Enron, the behaviour and composition of company boards has been unceremoniously hauled into the public eye.

It is not their natural position. When all is rosy in the corporate garden, directors tend to function as the low-profile power behind executive thrones. It is only when things go seriously wrong that their governance is questioned.

Right now, their skills, analytical rigour, objectivity and knowledge of company procedures are under scrutiny. So is their homogeneity.

Despite women's progress through the corporate ranks in recent years, it seems boys still rule in the boardroom.

A recent PricewaterhouseCoopers survey revealed that only 12.3 per cent of New Zealand companies had non-executive directors who are women.

Things are not much better overseas. Only 3.4 per cent of board positions in Australia's publicly listed companies are held by women.

Local examples include women such as Alison Paterson (Reserve Bank, Landcorp), Joan Withers (Tourism Holdings, Auckland International Airport), Rosanne Meo (Baycorp Advantage, Briscoe Group), Sue Suckling (AgriQuality) and economist Kerrin Vautier (Fletcher Building).

Karen Price, a partner at Minter Ellison Rudd Watts and president of the Auckland Women Lawyers' Association, has been gathering data on the boardroom gender lag and reckons some of it can be attributed to the "Mini-me" syndrome.

"Rather than going for diverse boards - and there's enough information coming out of the United States to suggest such diversity is helpful to the company's position - directors feel more comfortable picking someone who is like them."

That is dangerous, suggests Richard Westlake, himself a company director who also manages the Institute of Directors (IoD) Board Appointments Service.

"The last thing I'd want to see around boardroom tables is middle-aged men in grey suits with grey attitudes," he says.

"If you get too similar a group of people, then there is the danger of 'group think'. Nobody wants to rock the boat."

If everyone is driving the same way, there aren't the same checks and balances, agrees Price.

And while there is no way of judging whether board diversity helps keep companies ethically on track, there is, she says, evidence from US research that it does help company competitiveness.

"It's associated with greater receptivity to change and to higher levels of creativity and innovation, because board members are more likely to offer and challenge different points of view."

Most top-performing US companies have at least one women board member and the lower their ranking in the Fortune 500, the fewer the number with women directors.

If diversity is a good thing, the next question is: should the gender modification of boards be artificially boosted, or left to happen naturally?

IoD executive David Newman favours the latter. "I think appointments to boards should be on merit. The starting point is people's skill and experience. I don't mind target-setting ... provided it is not mandatory."

The trouble is that natural trickle-up has proved a slow process.

Even in professions such as law, where women are winning the numbers game, they are less well represented in senior positions.

While not normally in favour of a mandatory approach, Price says some of today's high-profile women are beneficiaries of affirmative Government policies in the 1970s. Some type of quota arrangement would, she suggests, encourage follow-through.

Women also need to be a bit less backward about putting themselves forward.

"You're never going to get more women on boards unless they put their hands up for these roles," says Lyn Provost, deputy commissioner of the NZ Police and newly appointed chairwoman of the NZ College of Management.

Her advice is to develop the right skills, choose an area where those skills can be used and to which you feel a strong sense of commitment, and talk to the right people.

Most new talent is initiated via the public sector, which encourages greater diversity.

The Ministry of Women's Affairs and the Crown Company Monitoring and Advisory Unit both run a search and screening service for potential candidates, as does the IoD and some recruitment agencies.

Basic attributes for a wannabe director include the ability to think strategically, relationship skills, management experience, and a good understanding of the governance role, plus whatever specific skills can be usefully brought to the task.

Increased advertising is a sign the search for directors is widening beyond traditional old-boy networks. That is partly a need for greater transparency in board appointments, says Price.

It is also in response to a need for fresh talent. And some of the talent will be female.

While they still represent just 17 per cent of IoD membership, women make up about a third of new members and are changing the membership profile by both gender and age.

But breaking the gender barrier to boardroom entry won't happen swiftly.

Alison Paterson, who is on six boards, two of which she chairs, feels strongly that women must earn directorships by performing at senior management level.

"They need to put in the hard yards and be good at what they do. You can't guide a company unless you understand the opportunities in that particular industry and know how to manage the risks."

Price thinks women need to push a bit harder.

"I don't think enough women are actively networking at the IoD or taking advantage of all the learning opportunities such organisations provide.

"You can't just decide you want to be a director, you have to plan for it for a minimum of five years - or, for women, more like 10."

* vjayne@iconz.co.nz

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