Directing change

Despite overwhelming evidence that company boards with women do better than those without, our boardrooms are still male bastions.
On the board of the state-owned Housing New Zealand Corporation, its subsidiary Hobsonville Land Company and the Counties Manukau District Health Board, Lope is something of an anomaly. Despite ample international research proving that corporate boards which include women outperform those that don’t, New Zealand boardrooms are still very male dominated.
The Census of Women’s Participation 2010 published by the Human Rights Commission in November, revealed women hold just 9.32 percent of directorships on our top 100 listed companies. Fifty-seven, including five in the top 10, have no women in their boardrooms at all.
Equal Employment Commissioner Dr Judy McGregor said the corporate sector should be embarrassed by the lack of women in governance roles. She says New Zealand risks real damage to its reputation as a world leader in ensuring women a fair go unless “there is a broad commitment to genuine change”.
Women fare far better in the public sector, accounting for 41.5 percent of those on government-appointed boards and committees. In accordance with its obligations under the international Convention on the Elimination of All Forms of Discrimination Against Women, the New Zealand government set itself the target of 50 percent female representation on public boards (which lead some of our largest and most powerful companies) by 2010.
The Ministry of Women’s Affairs, charged with advancing women in leadership, has set up a nominations service for state sector boards and committees which is proving effective. Still, this year’s figure is 8.5 percent shy of the target and 1.5 percent down on the 2008 result.
Lope, who specialises in family law and also chairs the not-for-profit Brainwave Trust, says she has often felt like the odd one out in the boardroom.
“I’ve had moments where I’ve looked up from chairing a committee meeting and realised I am the only brown person in the room, the only woman and younger than anyone else by a decade or two. That has required a deep breath before
plunging on.”
That said, Lope believes the challenges and rewards are worth it. She says her governance experience has honed her analytical, strategic thinking and decision-making skills and broadened her world view.
“Governance in the state sector requires consideration of a broad range of issues and future possibilities that have a large-scale impact. Involvement in decision-making at this level has rounded out my legal practice in ways I hadn’t anticipated.”
Lope also appreciates the many opportunities it has provided to meet and work with people she probably wouldn’t have encountered otherwise.
“They have expanded my thinking. I’ve been enormously lucky to be mentored by HNZC chairman Pat Sneddon, a visionary man who has given generously of his time and trust and demanded excellence in return.”
She is also grateful to be able to make a real difference.
“I’m sometimes overwhelmed by the enormity of the problems people struggle with on a daily basis. It restores me to contribute to decision-making that has the potential to improve their circumstances.”
Lope finds it disheartening that women’s lack of representation on boards is still an issue, given the well-documented benefits of gender-balanced boards.
“A gender imbalance on the board almost inevitably limits the range of skill sets, experience and talent at the table. Women can and do bring a different perspective to decision-making, which strengthens the robustness of decisions being made.”
According to Catalyst research in the US, companies with women on their boards are financially stronger by 35 percent while a 2008 McKinsey & Company study said US women on executive teams contributed to a 48 percent higher EBIT result than the industry norm.
International research has found boards with a gender balance typically perform the best. A recent study by the London Business School found that boards with relatively equal numbers of men and women were the most innovative and productive on average.
In May 2009, Business New Zealand, the Institute of Directors in New Zealand and the Ministry of Women’s Affairs published a report highlighting why having women on company boards is good for business. In the report, entitled ‘Women on Boards’, Prime Minister John Key questioned whether women are being denied opportunities for advancement.
“You have to wonder whether Kiwi businesswomen are getting the opportunity to succeed that they deserve. And you have to wonder whether our companies are making the best use of the talent on offer.”
Numerous New Zealand business leaders, male and female, have spoken out about the importance of including women on boards. Dr Nicki Crauford, chief executive of the Institute of Directors in New Zealand, has said women contribute to the diversity of skills, experience and perspective that all boards need.
“Shareholders should tap into the widest possible director candidate pool to create the best board possible. That pool increasingly includes some very capable women.”
So, given the evidence and support from key businesspeople, why are there still so few women on boards? The ‘Women on Boards’ report suggested many corporations may have outdated methods of recruitment. Many, for example, identify previous board experience as a key requirement.
The report advises business leaders to look outside traditional circles and be broader minded when assessing candidates. Getting more women in to the boardroom, the report contends, is a matter of making it a priority. The Ministry of Women’s Affairs, the Institute of Directors and various other networks and professional recruitment services can all help identify suitable candidates. The report also advises business leaders to identify women in their own organisations with strong leadership and business skills and assist them to rise through the corporate ranks.
“The best kind of succession plan will optimise internal potential, encouraging talented women to progress through senior management and on to boards.”
A global concern, it’s likely that overseas efforts to redress it will have repercussions here.
Shareholders and rating agencies worldwide are increasingly factoring the number of women on boards in to company assessments. Two major investment funds, Calpers in the US and Amazone in Europe, include a gender balance indicator in their investment criteria, while rating agencies such as Innovest and Vigeo are developing tools to measure gender balance.
Some countries, such as Norway, even compel private companies to include a certain percentage of women on their boards. In Norway, the quota is 40 percent and the British government is set to review the possibility of introducing a similar quota.
Across the Tasman, the Australian Securities Exchange (ASX) will require listed companies to set and report on gender diversity targets from January 2011 – a move which saw the percentage of women on ASX boards jump from 8.3 percent to 9.2 percent in six months.
The HRC’s Agenda for Change, published as part of the 2010 census, calls upon the New Zealand Stock Exchange (NZX) to monitor the ASX’s gender reporting and follow suit in 2012. It also asks private companies with few or no women on their boards to prioritise female appointments.
“Given both the business-case arguments and the social-justice rationale for female representation, it is perplexing that boardroom doors are closed to women at a time when global business requires transformation,” Dr McGregor has said.
Case studies
Joan Withers
When Joan Withers resigned from the position of chief executive of The Radio Network, the Crown Office Monitoring Unit (COMU) wasted no time in asking her if she’d like to be interviewed for a directorship on the board of the then government-owned Auckland International Airport.
With more than 20 years experience in the media industry, which included a chief executive position with Fairfax as well as The Radio Network, Joan was a stellar candidate.
“Wanting to downshift from full-time executive life, I agreed,” Joan explains.
Appointed to the board in 1996, Joan played a key role in the company’s privatisation and became chair in October this year.
These days, she is also the chair of state-owned energy enterprise Mighty River Power, deputy chair of national broadcaster TVNZ and a trustee of the Sweet Louise and Tindall foundations.
“I’m committed to only doing things that will make a real difference to New Zealand and New Zealanders,” she says. Joan enjoys the challenge of working in a leadership capacity across a variety of businesses. Holding a portfolio of part-time directorships also enables her to be more flexible with her schedule.
“In the past 18 months, I’ve been able to get some balance back in to my life. As a chief executive, you work a minimum of 60 hours per week. I’ve limited my directorship portfolio so I have more time to myself these days, but I’m still challenged from a business perspective. It’s the best of both worlds really.”
Joan says serving on a board in the public sector is much the same as serving on one in the private sector.
“The primary objective on both is to enhance value for shareholders and virtually all the same disciplines apply. SOEs in particular are replicating commercial tactics in the private sector.”
Joan believes her extensive governance and senior management experience are key to her success in the boardroom, as is her ability to work collaboratively and identify up-and-coming talent.
As for the issue of women’s poor representation in boardrooms, Joan says she is more pessimistic than she used to be about the situation improving.
“I used to say it was an evolutionary process – that it was only a matter of time before women were well-represented on boards. But it’s not. The issue is not improving. The Ministry of Women’s Affairs has spent a lot of time trying to improve the ratio of women on boards, as have organisations such as Global Women. I think they have piqued the consciences of some of those who were not appointing women. But, women have got to want to take on these roles and I guess I’m not sure anymore that they do.”
In Joan’s view, corporations need to identify women with senior management and governance potential at an early stage and ensure they gain the necessary skills and experience.
“No one wants token female board members. They need to possess the full suite of corporate skills. No enlightened chief executive will regret investing in helping their most talented staff, male and female, to rise to more senior positions. It simply makes good business sense.”
Jo Brosnahan
Jo Brosnahan, chair of government-owned environmental research agency Landcare, believes all New Zealand companies need gender-balanced boards to maximise their effectiveness.
“Diversity is essential if innovative thinking is to occur - people from similar backgrounds think the same way. Having women around the table is one way of ensuring that diversity is present.”
A director of Crown Research Institute Landcare since 2006, Jo, an Aspen scholar, has also held directorships with Housing NZ, the Testing Laboratory Registration Council, the Growth and Innovation Advisory Council, NIWA and the Northland Regional Development Council. She’s also clocked up a total 22 years as a chief executive with the Northland and then Auckland regional councils.
Jo held an executive position with NZ Railways and ran her own consultancy company before starting with the Northland RC. She explains she was headhunted for the role of chair of the Northland Regional Development Council as a relatively young executive, saying she’s “still not sure how that occurred”.
Later registering with the Ministry of Women’s Affairs, she was subsequently asked to join the board of privately-owned Northpower and state-owned NIWA.
With keen interests in leadership issues and business strategy, Jo thrives in the boardroom environment.
“I don’t think of what I do as a career,” says. “I like to think that I am living what I love to do.”
She finds serving on state sector boards particularly satisfying as they “involve an element of good,” although she points out they don’t pay as well as private sector boards. She says the responsibilities and disciplines on both are largely the same.
Jo believes it is her broad experience as a chief executive and senior manager that give her an edge in the boardroom in addition to her talents for strategic planning and practical and thoughtful leadership.
For Jo, one of the most enjoyable and rewarding aspects of her work on boards is the opportunity it has provided to work with “a whole range of very impressive people, all of whom bring a range of experiences and skills to the table”.
“I have learned from them all,” she says.