Big business focus on diversity good for economy

PRESS RELEASE: Big business focus on diversity good for economy

A focus on diversity at the top of New Zealand’s publicly listed companies will ensure more effective governance and have a positive impact on our economy, says a governance expert.

Independent director Sarah Haydon, who is chair of the Cavalier Corporation Limited and serves on a number of other boards, has welcomed changes to the NZX Corporate Governance Code which require listed companies to have a comprehensive, written diversity policy in place.

“McKinsey research concludes increased diversity on boards leads to better financial performance. The board’s role is to make good decisions; increasing diversity of thought and having the rights skills and experience at the table enables that to happen.”

Boards are good at paying attention to things they are required to measure, so moving to a “comply or explain” regime will help accelerate the rate of change towards more diverse teams of directors, Haydon says.

She believes it will also lead to more gender-balanced boards, as it will encourage the use of external recruitment processes to widen the candidate pool. “There are plenty of highly qualified women seeking board appointments; supply is not the issue.”

But, she warns, it won’t happen overnight. “The rate of change on listed boards is slow, with an average tenure often eight years or more.”

Haydon, lead judge for the 2017 Diversity Awards New Zealand, says 20 per cent of this year’s entries were from listed companies, and she hopes to see more in the future.

“The new reporting regime will give diversity and the ways in which it can be achieved even more focus and we are sure to see some exciting new initiatives coming forward.

“We need to encourage businesses to share their stories of success.”

Winners of the 2017 Diversity Awards New Zealand will be announced at a gala dinner in Auckland on 24 August. This is the 20th anniversary of the awards. For more information or tickets please visit www.diversityworksnz.org.nz

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