Who's running New Zealand's companies?

Women are largely absent from the top table at NZX-listed companies

There are more men named David running New Zealand companies than there are women. That is, women of any name. There are also more men named Mark, Christopher and Michael, and just as many Johns and Graemes or Grahams, says Deborah Russell.

That’s what an analysis of the first names of CEOs of all the entities (companies and investment funds) listed on the New Zealand Stock Exchange (NZX) tells us.

Looking at the chairmen of listed firms, the same pattern of names appears. There are more men named Peter, David, John and Chris than women of any name chairing NZX-listed firms, and just as many men named Michael. (See the tables for a summary).

In percentage terms, of the 270 or so people who are either CEOs or chairmen of NZX-listed firms, about 4 per cent are women.

At first glance, the news is somewhat better with respect to directorships. Using the same technique of counting each individual only once, there are 744 directors of NZX-listed firms. Of these, 104 (14 per cent) are women.

Even so, it’s still a man’s place around the board table. There are 60 firms that have all-male boards, and no firms whatsoever that have all-female boards. Four boards have equal numbers of men and women, although three of those firms are related investment funds, all run by the same people. Only two boards have more women than men.

In addition to the 60 firms that have all male boards, there are another 52 firms that have only one woman on their board. That’s over 70per cent of boards that have very low female representation. No matter which way the numbers are juggled about, women are very much in the minority in the top level management of NZX listed firms.

Without even considering equity issues, this is bad news for New Zealand firms. Research tells us that firms do better when there is more diversity in their leadership and management. That seems to be because people from different backgrounds bring different perspectives to issues, encouraging people to test their ideas and arguments against a variety of competing alternatives. Proposals that have withstood scrutiny from a range of perspectives are more likely to succeed.

Having at least one woman on a board increases diversity, as does having people from different ethnic and national backgrounds. However, it seems to be important to have more than just one “different” person.

Research also tells us that contrary to urban myth, women support each other in discussions, ensuring that each other’s voices are recognised and heard. There’s a famous Punch cartoon, with a chairman saying, “That’s an excellent suggestion, Miss Triggs. Perhaps one of the men here would like to make it.” Having more than one woman on a board makes it more likely that Miss Triggs and her peers are given credit for their ideas.

Fortunately, there’s a broad range of work going on to encourage firms to diversity their governance. NZX requires listed firms to report the gender diversity of their boards. Firms are not required to adopt a diversity policy, but they are encouraged to do so. This simple disclosure requirement means that boards have to at least consider issues of diversity.

The New Institute of Directors has a Future Directors programme. Encouraging women to participate in this programme will enhance their chances of obtaining a board position.

The Ministry for Women runs a nominations service to facilitate the appointment of women to state sector boards and committees. This service could be expanded to private sector companies as well. The objective would be to encourage women to take that next step up, and to provide a resource for companies to find excellent women for board positions.

It may seem absurd to compare Peters, Davids and Marks with all women. Yet when we do, it perfectly illustrates how corporate New Zealand excludes women.

All it takes is a bit more thought and effort, to pause before leaping to the safe choices that are always made. Then, in ten years time, there will actually be many more Susans, Rebeccas and Sarahs appearing in the lists of directors.

Dr Deborah Russell is a taxation and business lecturer with the Massey Business School

*Data was sourced from annual reports presented to NZX during the year from 1 April 2014 to 31 March 2015.

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