A top diversity advocate has welcomed the new NZX corporate governance code, saying an increased focus on diversity will have a positive impact on New Zealand’s workplaces.
“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 out of some of our biggest organisations,” said independent director Sarah Haydon, who is chair of the Cavalier Corporation.
The new code requires listed companies to have a comprehensive, written diversity policy in place and Haydon said she hopes organisations will use the prompt as an opportunity for innovation.
Haydon – who is the lead judge for the 2017 Diversity Awards New Zealand – said just 20 per cent of this year’s entries were from listed companies and suggested the new guidelines would encourage more top companies to get on board.
“We need to encourage businesses to share their stories of success,” she stressed. “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.”
Auckland-based Haydon says boards are used to 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.
She also believes it will 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,” she said.
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.”