Dalziel - Business & Professional Women conference
28 April 2006
Lianne Dalziel Address to Business & Professional Women conference
The Ministry of Women's Affairs is investigating a range of possible approaches of mirroring our public sector success in appointing women to boards in the private and local government sectors.
Thank you for the invitation to address you, especially with the theme of your conference 'New Dimensions of Leadership in the Community', which is very timely. I am a former member of the Christchurch East Business & Professional Women's Club, but unfortunately with the transition to government I have not been able to maintain my membership. There is a bit more time up one's sleeve in opposition and six years ago that changed. Not that I am complaining.
Although I have been invited to address you as Minister of Women's Affairs, my other two portfolios of Commerce and Small Business are equally relevant to an audience of Business and Professional Women. I didn't ask for the Women's Affairs' portfolio, but I have been pleased to find that there are synergies with the other two portfolios, which has made the combination a winning one for me, particularly as a qualified lawyer. Because I haven't run a small business, I have had to do some research into that portfolio, but that would be the best part of my job, visiting small to medium sized enterprises (SMEs), from start-ups, to relatively new businesses, to those that are well-established.
I am constantly impressed by the extraordinary talent, innovation and creativity I am exposed to on a weekly basis. It makes me realise how important it is for governments to see things from the SME perspective, which confirms for me how right the government got it when we decided to appoint a Minister of Small Business in an advocacy role and to appoint a Small Business Advisory Group to ensure that the SME voice is heard in the policy development process.
And it confirms my frustration with the political nonsense that masquerades as Parliamentary debate these days. I just want to get on with the job rather than having to defend new ideas that we are testing to better engage with the SME sector or to defend the existence of the Ministry of Women's Affairs that celebrates its 20th Anniversary tomorrow week, but whose work is not yet done.
Maybe those who would like to see an end to the Ministry of Women's Affairs would like to see an end to all women's organisations - NCW, Maori Women's Welfare League, Pacifica, Rural Women, BPW - any other organisation that ensures that the interests of women are not lost in what is described by some as the 'mainstream'? Of course not - and that is because it is trite to say that because women have their own Ministry that men are somehow disadvantaged. If the statistics were reversed then we could agree, but we must question:Why women earn on average 20 per cent less than men; Why male University graduates earn higher salaries than female University graduates even when they have the same degree and are doing the same job;Why there are so few women on boards of directors, especially in publicly listed companies;Why there are such significant gender disparities in the Modern Apprenticeship Programme and in trade training;Why women still undertake disproportionate responsibility for childcare and household management even when they are in the paid workforce and have a partner;Why there is still such a disproportionate level of partner violence male against female at the serious end of the scale - why does a woman die nearly every month in this country at the hand of a partner or former partner? What are the implications of these realities for our society as a whole? Isn't it in our combined interests that we seek to address them? These are the areas where the Ministry of Women's Affairs focuses its attention.
So perhaps its focus is proving to be a challenge to some powerful vested interests - who is challenged by women's economic independence, work-life balance and health & well-being?
The Ministry of Women's Affairs is the smallest core government department with a staff of about 30 people and yet I feel that I have to spend time justifying its very existence, not to groups like BPW who understand the gender implications of these three areas of work, but to those who jump on the bandwagon of populism. Here is what one person said about what she described as the report-writing role of the Ministry of Women's Affairs:
The problem is that it doesn't do one thing for the woman who has to: get up early, get ready for work, get the children's breakfast, get them washed, dressed and their bags packed for school, drive them to school, get to work, work in her paid employment, rush home (having already arranged for the children to be collected), wash clothes, get sports clothes ready for children, oversee homework, cook dinner, do dishes, get children to bed and then spend quality time with her husband ...
I quoted this at the Unifem International Women's Day breakfasts and on both occasions it caused laughter - why? Because they, like me, assumed throughout the description of the day that there was no husband.
In a strange way this advocate for shutting down the Ministry has explained why we need a Ministry that can ask hard questions like: why do some people only start talking about shared parenting when the relationship between the parents is over? Maybe we need to be reinforcing the message that when we asserted that 'girls can do anything', we didn't mean they had to do everything!
A recently released Ministry of Social Development survey on Work, Family and Parenting uncovered disturbing news that, although almost everyone agreed that housework and childcare should be equally shared when both parents work, less than a third practiced what they preached on the housework and only half equally shared childcare responsibilities.
But it does raise real issues of concern. For example how can the government deliver policies that encourage work-life balance, when genuine choices may not exist at home? I know that BPW presented an extremely positive submission in support of the Flexible Working Hours Bill. But your position is the opposite of Business New Zealand's position. Why? I suspect that like the example, saying that you can ask for flexibility and feeling safe about doing so, are two different things.
And if Wayne Mapp's Bill on a 90 day PG-free period were to come in, you can say goodbye to any ability to ever ask for flexibility, because when you can be sacked without reason, you just don't ask.
The Flexible Working Hours Bill has been deferred for 12 months to consider what the reality is out there. It would be good if BPW would consider doing a survey of its members to establish what their perspective of the current situation really is. That same MSD survey found that many couples preferred the option they hadn't chosen or couldn't choose - so where both were in work, a third wanted one at home; whereas where one was at home, almost half wanted both to be at work. I think we need some more qualitative research to understand why this is - it cannot just be that the grass is always greener on the other side of the fence. I suspect that it will depend entirely on the understanding of the parenting role in those formative years, how stay-at-home parents are seen by their family and friends and the level of satisfaction parents derive from that, coupled with a consideration of the level of personal satisfaction and flexibility available in the workplace.
Anyway, this is an area where you can play a leadership role - in fact I believe it is imperative that you do so. If you want organisations like the Business Roundtable to lead the debate about these issues, there is a risk that the mantras they chant around freedom of choice and individual negotiations with employers, will leave women absent from the very debate that is more often than not about them.
That's my challenge to you.
Now I want to speak about another form of leadership. I am sure most of you heard or saw news reports last month about the low number of women on the boards of New Zealand listed companies and in a number of other areas of leadership. What generated that news coverage was the 2006 New Zealand Census of Women's Participation, prepared by the Human Rights Commission and the New Zealand Centre for Women and Leadership.
The census showed that women continue to be under-represented in leadership roles in most sectors. For example, women make up only:7.1 per cent of directors of the Top 100 companies on the New Zealand stock exchange (NZSX)16.9 per cent of university professors and associate professors18.9 per cent of mayors; and41 per cent of members of government statutory bodies. At 7 per cent, the proportion of directors of companies on the New Zealand stock exchange is not only derisory in absolute terms, but we also lag behind many of the countries with which New Zealand tends to compare itself. It means that the private sector believes that less than 50 women in the whole of NZ are qualified and able to provide governance and leadership to their companies. For instance, women are:22 per cent of company directors in Norway13.6 per cent in the United States10.5 per cent in the United Kingdom8.6 per cent in Australia. Its good to have these figures in the public domain and the beginnings of a debate about what they may actually mean in terms of missed opportunity.
Until now, the response to raising the issue of the lack of women in leadership positions has tended to be one of two, somewhat contradictory knee-jerk reactions. The first response you tend to hear is the 'but women are running the country' argument. This is based on the success of a small number of very talented women including Rt Hon Helen Clark, Dame Sylvia Cartwright, Dame Sian Elias and Theresa Gattung. Yes, the Prime Minister, the Governor-General, the Chief Justice and the Chief Executive of our biggest company are all women, and that's great, but what is usually overlooked is that these women are remarked upon largely because it is remarkable they are in those positions.
If it were as common to find a woman in a leadership position as a man, we would all be talking about something else.
The second common response is the "there are no women with suitable skills argument". Now you don't have to look far to know that that argument is nonsense - a quick glance around this room would do it. The problem, I suggest, is that businesses are not looking in all the right places.
To back this up, let's consider the experience of the state sector. The Ministry of Women's Affairs' Nominations Service recently undertook the first whole-of-government stock-take of membership of state sector boards and committees and found that women now represent 41 per cent of the total Government-appointed membership of those boards. That's still not equal membership, but it's significantly better than 7 per cent and it is a figure that has been steadily improving.
So what makes the state sector different in this regard? Well the first thing is that the government has set itself a target, which is 50 per cent representation of women on state sector boards and committees by 2010. This doesn't mean quotas, or 50 per cent on every board - it just means that across all the boards we should have a goal, which means we continually strive to achieve it.
The second thing is to recognise that everybody - male and female - tend to go to their own networks first when looking for potential appointees and if women are not part of those networks, they will not be shoulder-tapped, so they are not even considered. It's not that women are being rejected; it's the fact that they are not even on the radar screen. What we need to do then is set up effective mechanisms to find women with suitable skills and competencies and then put them in the way of the decision-makers. Those women would still have to compete with all the other candidates, based on what they can offer, but at least they are on the radar - and as we have shown in the public sector there really are women out there with the skills to serve on boards.
I believe the success of the Nominations Service is because it maintains a database of suitable women, built up over many years and constantly updated, but most importantly it works with the appointing agencies to understand their needs. It then uses its database to find women who have the attributes needed for the position and nominates them. It does not appoint - it simply nominates. The key to increasing women being appointed though is only nominating appropriately qualified candidates - if the Service cannot find a woman with the skills needed, then it doesn't nominate. This is not about token representation; it is about effective participation.
I follow the international research and studies with great interest, because I reject the tokenism line. There is a growing body of evidence from international studies that suggests that diversity on boards is, as the title of one Canadian study puts it: 'not just the right thing, but the bright thing'.
Although causation is difficult to prove, a number of studies have found a correlation between stronger financial performance and better representation of women on boards. I'll give you a couple of examples:A 2001 Catalyst study of 353 Fortune 500 companies found that the group of companies with the highest representation of women on their top management teams experienced better financial performance than the group of companies with the lowest women's representation: return on equity was 35.1 per cent higher, and total return to shareholders was 34 per cent higher.
Another study of Fortune 500 companies between 1980 and 1999 conducted by Pepperdine University found that firms with a high number of women executives outperformed their industry medians on a range of measures of profitability. The firms with the best records of promoting women were consistently more profitable than those with good records.
These, and other studies, are pointing to a number of potential benefits for companies from better participation of women, and more diversity generally. For instance:Groups that have more diverse skills, knowledge and experience have the potential to consider a greater range of perspectives and make higher quality decisions.Diverse teams can leverage their diversity to identify and avert or solve problems.
For example, diversity on boards can help companies engage better with key constituencies including shareholders and employees.Companies that take advantage of their female talent at a management and governance letter tend to respond better to a female customer base.Greater diversity in leadership can help a company build its reputation as a responsible corporate citizen that understands and is responsive to its community.
In the UK, the Tyson Report on Recruitment and Development of Non Executive Directors summarised the position this way: '. the most fundamental business rationale for a company's commitment to greater diversity in the boardroom, like its commitment to diversity at all levels, is a simple and compelling one - the desire to find and employ the best talent'. It's probably no surprise to you that overlooking the skills of 50 per cent of the population doesn't make good business sense, but knowing this and changing it are two different things. Since I became Minister I have been asking whether there is any role for government in helping business tap into those skills. I'm convinced that the answer is 'yes', though the most effective 'how' will require some further work.
The government has shown leadership in this area with its commitment to the participation of women on boards. However, just because we have found a model that works for the government, does not necessarily mean the same model would work in the private sector where there is diverse ownership and a greater diversity of interests.
I was very pleased that the Human Rights Commission's Census included an Agenda for Change, which suggests resources being made available to the Nominations Service to allow its use by private sector companies interested in women appointments to boards of directors. However, I am not going to agree to a proposal when I don't know if it is going to produce the results we want to achieve.
I have signed off on a project that means that the Ministry of Women's Affairs is currently investigating the range of possible approaches of mirroring our public sector success in the private sector and local government sector as well. The approach adopted will involve working closely with the business sector, local government and with representative organisations such as your own. In case there is any mischief-making with this announcement, I am ruling out quotas and legislative intervention. And while targets can be good, they are only effective if they are set by the organisation that has to achieve them, as well as only really being a means to an end.
My motivation in adopting this approach is not just to give women the opportunities they should have to achieve their potential, but also to eliminate the current waste of talent, which New Zealand simply cannot afford.
As the Minister responsible for the Nominations' Service, if there is any woman in this room tonight with board or other relevant experience and you are not on that database, there is now no excuse for you not to be there. The website is very easy to navigate and I have the Manager's card here for you to take if you prefer to phone and say Lianne asked me to call.
You - and other BPW members around the country - have a role to play in improving women's participation in all walks of life - public and private. You can do this by:encouraging women who are suitably qualified or experienced to register with the Nominations Service - and signing up yourself if you are one of those women; and advocating within the organisations for which you work or in which you are shareholders, for better representation of women on governing boards.
These are actions that are completely consistent with BPW's roles of advocacy, promoting leadership, personal development and networking.
I know it will be some future Minister of Women's Affairs who gets to celebrate the day that 50 per cent of board members on New Zealand listed companies are women, but I hope on that day those who are there will reflect on the foundations that were laid by the Ministry of Women's Affairs opened by the Rt Hon David Lange on the 6th May 1986 and hope that it hasn't taken another 20 years to come to that day.