Champions for Change leads the way towards gender balance

18 October 2019: Organisations that have made tangible, CEO-led commitments towards diversity and inclusion are already outperforming the NZX-list when it comes to board and executive diversity. That’s according to the second annual Diversity Report from Champions for Change, the largest measurement of gender diversity in New Zealand.

Last year, companies representing 83,000 employees provided data for the Diversity Report; this year, companies representing more than 113,000 employees reported.

Year-on-year comparisons of 26 reporting organisations show an increase in women on their boards from 35.0% to 39.4%, indicating the value of diversity initiatives within these organisations.

According to Champions for Change Co-Chair David McLean, these results show progress is possible when leaders make it a focus: “Our target is 40:40:20 for gender balance on boards, so it’s great to see us getting so close,” he says.

The 40:40:20 target refers to a goal, at each level of seniority, of 40% of both women and men, with the remaining 20% being of either gender, allowing for a natural flow of people into and out of the organisation; this could mean six men and four women in management - or five of each.

Of the 39 participating organisations in 2019, women represent more than 37% of board members and 34.6% for executive officer roles (Key Management Personnel, or KMP), versus 22.8% and 23.5%, respectively for NZX-listed companies.

Practices such as flexible work hours, increasing voice and visibility on diversity and inclusion within the workplace, and developing fair and clear workplace policies such as equal access for both parents to parental leave are all tangible ways Champion organisations are propelling progress.

“With the right leadership positive change can happen,” says McLean.

The Diversity Report also contains preliminary ethnicity data from 69,000 employees, which reveals that while New Zealand is one of the world’s most multi-cultural nations with a strong bi-cultural heritage, decisions are predominantly being made by people of one ethnic group.

The three most senior roles in reporting companies are overwhelmingly held by people of NZ European descent, with only 18% of leadership roles on average held by non-NZ Europeans.

“Measuring cultural affiliation—who employees feel they identify with—will be an ongoing process of refinement and education so that people understand why we are asking for this information,” says Global Women CEO Siobhan McKenna. “We are also refining our data-analysis approach, as New Zealand is unique compared to other countries in that we allow people to self-identify their cultural affiliations.”

McKenna notes the Report data is particularly valuable as it points to where organisations need to do better to support diversity at all levels.

Champions for Change Co-chair Michele Embling says members of the Champions group aim to increase the diversity of their leadership teams to better reflect the society we live in.

“Measuring the cultural affiliations of our employees lets us track our progress towards this goal,” says Embling.

The results of the Diversity Report were launched at a breakfast event on October 18 to business leaders, hosted by Champions for Change.

Also, at the event, a New Zealand-first pilot of gender pay gap measurement was announced, which will see 20 Champions for Change companies voluntarily report on their gender pay gap. The group has agreed on a gender pay gap methodology to test within the pilot; the intention is to make the refined testing methodology available to other businesses across New Zealand post-pilot.

McLean says governments in some countries including Iceland and the UK have been forced to step in and mandate gender pay gap reporting.

“In New Zealand we believe that the private sector can lead on transparent, comprehensive reporting of the gender pay gap because as a collective, we are aligned about the benefits of diversity,” says McLean. “This pilot will test and enhance the methodology we use, and by making it freely available post-pilot, we hope others will measure their gender pay gaps, too.”

The gender pay gap is the difference between the amount that men and women get paid. Organisations with a higher proportion of women in management positions typically have lower gender pay gaps.

“Closing the gender pay gap is an important quality measure for New Zealand society,” says McKenna.

Minister for Women Julie Anne Genter was in attendance to announce Global Women’s research titled Addressing the Gender Pay Gap.

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