Gender quotas should be a last resort

The Institute of Directors in New Zealand (IoD), says introducing gender quotas is not the best solution to increase the number of women directors on New Zealand boards.

IoD Chief Executive Dr William Whittaker said the IoD will not discount gender quotas, but considered such measures “The IoD promotes diversity in all its forms, but would like to see voluntary practices. There are better ways to increase women’s representation on boards than introducing quotas.”

Dr Whittaker said that while the number of women on New Zealand boards needed to continue to increase, progress was already occurring and this trend would continue to grow naturally.

“The IoD expects the number of women on boards to grow at a faster rate due to greater awareness of the issue and the impact of initiatives that are already in place to further increase representation by women on boards.”

There is greater understanding that improving board diversity isn’t just about equality, but about how board diversity actually helps improve board performance, particularly bottom-line financial performance.

The IoD, supported by the Global Network of Director Institutes, which represents over 100,000 directors worldwide does not support legislating for quota systems.

“Introducing quota regimes has tended to force boards to appoint women who are not necessarily the best candidates, and evidence from overseas has not proved conclusively that putting quantitative requirements in place results in better organisational performance.

In fact, there is an emerging body of evidence that suggests that some ompanies have adopted a very cynical approach to the quota system.”

Dr Whittaker said many women directors also thought quotas were not the best option as they believed they should be appointed on merit and not because of a quota.

The GNDI prefers the following measures:

• Board nomination or governance committees can set a good example through their commitment to diversity

• Companies should develop their own diversity policies and report to shareholders on progress against them

• Companies should consider their executive talent management programmes and integrate principles and practice

• Boards should widen their approach when making appointments to non-executive positions. The evidence available indicates that the female talent pool is deepening, e.g. women graduates

• Board evaluation should be used to assist in the development of more diverse boards.

Several initiatives are under way to increase the number of women at board room level in New Zealand, including the IoD’s Mentoring for Diversity programme, which had already produced solid results with several women who had been mentees now appointed to New Zealand boards.

“It’s the IoD’s hope and expectation that the number of women board members will continue to increase and we will be playing an active role in making sure this happens.”

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