Comment

No melting pot in make-up of company boards

Cat MacLennan helped conduct a survey of the top NZ companies to establish the ethnicity of their directors. The results were not surprising, but also far from encouraging.

Is having a Pākehā director who “spends a lot of time in China” the equivalent of having an ethnically diverse company board ? Apparently, at least one of New Zealand’s largest listed companies thinks so.

I emailed NZX’s Top 100 companies asking them to provide information about the ethnicities of their boards of directors.

One company out of the hundred provided details of a director’s iwi. Six of the companies reported having Māori directors. One company advised it had Pacific Island board members, but did not specify countries.

There were six Asian board members.

The total number of directors on NZX’s Top 100 boards is 631.

I asked each of the companies about their board’s ethnic diversity because looking at the photos and names of the board members of the Top 100 firms provides an almost uniform picture of whiteness and maleness. However, obviously it is not possible accurately to ascertain ethnicity from photos and names, and I wanted to obtain definitive information.

Only 44 of the companies replied to my email, and only 19 of the 44 provided the requested information. A number of companies said that they did not collect or hold information about the ethnicities of their directors.

One example was a firm that said it was not required to hold that data, and hence had never collected it. Despite having a male CEO, a male chair, a board with only one woman out of seven directors - with all seven appearing to be Pākehā - that company responded without irony that it was focused on a board with a “diverse background and skill set.”

Other companies fudged their answers in various ways. Two companies used the Human Rights Act and the Privacy Act to justify not providing the information. One said that it did not collect or disclose people’s ethnicities, before listing the prohibited grounds of discrimination under the Human Rights Act. Another said the authorisation of the individual concerned would need to be obtained “as per the Privacy Act” before ethnic information could be released.

Other companies provided information about citizenship or residence, rather than ethnicity. One responded with residence details, including the information that one director was a resident of the United Kingdom “who spends a lot of time in China.”

When I sent a follow-up email explaining that it was ethnicity information I was requesting, the firm replied that “Please note, this information is personal and therefore not available.”

Two companies referred to Irish and Italian heritage.

Another firm which advised that all its directors were Pākehā/European went on to say that –

“They have asked me to convey that they feel that this is quite a narrow definition… to quote one Board member…’Gosh – I am a real mix up and like most people reluctant to be categorised by a couple of words… I would encourage a response that highlights that we are all increasingly a melting pot now’.”

The reason I asked the companies about the ethnicity of their directors is that they are plainly not melting pots. In 2019, the overwhelming majority of the directors of our largest listed companies are Pākehā and male – as they always have been.

As the Stock Exchange regulator, NZX could lead by example in promoting ethnic diversity but chooses not to do so. Its own board and the boards of its eight Smartshares funds listed on the NZX Top 100 are as white as the other boards.

I don’t expect this to change any time soon - but I would be delighted if every one of the NZX Top 100 companies proved me wrong.

The census of gender and ethnic diversity on the boards of NZX’s Top 100 companies by capitalisation, conducted by AUT Professor Judy McGregor, Simplicity NZ Ltd Managing Director Sam Stubbs and Barrister Cat MacLennan, is published on Monday November 18, 2019.

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