Moving on up
Since New Zealand led the way in giving women the vote in 1893, we’ve had plenty of women in high profile roles, including prime minister. So we’re doing okay at gender equality, right? Well, no actually, when it comes to the upper echelons of business. By Fiona Rotherham


SOME YEARS ago Katherine Corich and her banker husband, Martin, switched roles. He moved to be full-time caregiver of their children and she focused on leading her knowledge management company Sysdoc.

“It meant I could meet the demands of running a growing company which had international dimensions. I couldn’t have achieved that if he hadn’t made that choice, not if I wanted to keep the family in balance,” Corich says.

That’s a societal change, and as the men who have been early adopters of the home role start telling their stories, Corich thinks a lot more men will choose to follow them.

“If you are a male who is thinking about whether you take the home role in a partnership where there are huge wealth-generation opportunities because a female partner has income-earning capability or entrepreneurial capability that is scaleable, that gives you a lot more financial freedom in the medium to long term to achieve other goals and investments.”

Corich’s husband can testify to that. While bringing up the couple’s four children, he was able to use his banking skills and wealth generated by his wife’s multimillion-dollar company to build up a diversified global property portfolio.

But not every woman in senior management with a family will have a partner or husband willing to take on the home role. Corich reckons struggling with work/life balance is a key reason there are fewer women in senior management roles in New Zealand (last year’s Census figures show the proportion of female chief executives and managing directors in the private sector is 19%, down 3% in the last decade).

Other statistics are just as damning when it comes to gender diversity at the top levels in business. In the latest Grant Thornton International Business Report, New Zealand slipped down the global league for the percentage of women in senior management roles, from fourth equal in 2004 (31%) to tenth (24%) today. Of the 150 New Zealand businesses surveyed, 37% had no women in senior management, 40% had only one, 13% had two and 10% had three or more.

One consequence is a weakening of the pool from which potential women directors are drawn. Almost 75% of the top 100 companies listed on the New Zealand Stock Exchange have no women at the governance level, according to the New Zealand Census of Women’s Participation 2006. Women account for 7.13% of corporate governance positions in the private sector, up a fairly dismal 2% from 2004. We’re lagging behind other countries such as Australia (8.6%), the UK (10.5%) and the US (13.6%).

The picture differs hugely in the public sector where affirmative action has meant women now account for 42% of those on statutory boards, including SOEs. That’s still shy of the 50% former prime minister Jenny Shipley promised would be achieved by 2000, a target now extended to 2010 by the government.
Yet despite the numbers of experienced state sector women directors, only three women have been named by the Institute of Directors as distinguished fellows (recognising governance leadership) and only 22 women are among the 118 given provisional accreditation (the pool of potential private sector directors).

Children’s clothing company Pumpkin Patch is one of only two NZX listed firms with gender parity on its board. Executive chair Greg Muir says the 50/50 gender split was not deliberate and the three female directors are there because of their skills and experience. However, given that women form a huge part of the company’s client base, having women directors is a big advantage for the company, he says.

Contrast that with listed whiteware manufacturer Fisher and Paykel, which has no female directors, says Dr Judy McGregor, the Equal Employment Opportunities (EEO) Commissioner. “The company I often use in the category of ‘could do better’ is Fisher and Paykel as it sells in excess of 80% of its whiteware product to women and uses the New Zealand Silver Ferns as a major marketing tool yet it doesn’t have a woman on the board. It seems to me if you have a major female consumer base and you are marketing to women, that you could probably use a female perspective on that board.”


The evolution theory
Fairfax New Zealand boss Joan Withers, the sole remaining CEO of a NZX listed company, has always subscribed to the evolutionary theory that more women coming onto private sector boards is just a matter of time, but now thinks her theory is looking a little thin. “I’m not seeing it happen. It’s been ten years since I started my governance career and it’s no better in terms of the numbers.”

Surely capability is more important than gender? As Greg Muir says, directors owe it to shareholders not to sacrifice competence for diversity. And anecdotally, some of the women appointed under affirmative action to statutory boards have not been up to the job, he says.

“This can put people off. You’re better selecting people based on whether they can do the job rather than having questions around whether they are there for the wrong reasons.”

The argument gets McGregor hopping mad. “I’ve heard every possible excuse as to why women are not represented on 63 of the top 100 companies in New Zealand. Sure there are women who don’t cut the mustard. I’ve sat on many governance boards where men don’t cut the mustard either and that’s not used as an example of why we don’t have men on boards. That’s not a reason for New Zealand to languish at the bottom of the corporate world on governance.”

Studies confirm that companies with more women on their boards tend to perform better, says Lianne Dalziel, Minister of Women’s Affairs, Commerce and Small Business, who prefers to make a business case for diversity, not tokenism.

One such study — a 2004 survey by American research organisation Catalyst — examined whether there was a link between gender diversity in top management teams and US corporate financial performance in the second half of the 1990s. It found those companies with the highest representation of women in top management experienced better financial performance than those companies with the lowest women’s representation. Return on equity for those with more women was 35.1% higher and total return to shareholders was 34% higher.

If there’s evidence, then, that diversity helps the bottom line, why aren’t things changing more quickly?
Dalziel says she is no conspiracy theorist; she doesn’t think men sit behind closed boardroom doors determined to keep women out. But when looking for new directors, board members tend to suggest other people they have worked with. That is why so many male directors sit on a number of company boards.

McGregor says the fact boards tend to be like “self-replicating worms” hinders opportunity for women.
Others say the situation is changing, slowly. Professional director Sue Suckling reckons the days of appointing your mates from the golf course are gone. Private sector boards now frequently use formal recruitment processes to identify the skill sets needed and then get independent recruitment firms to find the best person for the job. That opens up a greater range of candidates, she says.

“When I first got involved in governance 20 years ago, there was very little of this type of process.”

Yet a governance survey of 2,100 Kiwi firms conducted last year by Waikato University’s management school found 68% of directors are still selected by fellow directors or existing management. Listed company boards are conservative in their choices because shareholders don’t like wrong decisions, says Nicki Crauford, executive director of the Institute of Directors.

Like many others, Suckling is not a fan of affirmative action as practised in the US, as well as Nordic countries. Women’s participation in governance is not a numbers game, she says. The calibre of governance is more important. If the right processes are followed, that inevitably will lead to a wider variety of appointees, she says.

One answer is to widen the talent pool, as Sandy Maier and Jens Mueller from Waikato University’s management school are trying to do with Finddirectors.com. The new website already has 300 directors listed.

“Normally companies would not have access to them unless they go through professional recruiters but that can cost between $15,000 and $20,000 and that is not a choice for many small to medium-sized companies,” Mueller says. There’s a growing trend worldwide for mainly family-owned SMEs to appoint independent directors.

It’s cheaper than hiring them as consultants, Mueller says, and they should help companies grow. Having more women on SME boards should also give them the necessary experience and profile required to get noticed by larger listed entities, he says.

“I think New Zealand has a glass ceiling. There is no question that it is a macho environment. Everyone knows where Theresa Gattung worked because it stuck out, which shows it is not normal yet to have a lot of women in larger or even smaller firms in a responsible position.”

Australian professional director Eileen Doyle was the first woman to be appointed to the board of Steel and Tube, one of the country’s top 30 listed firms. She thinks women need to concentrate on their career paths in order to get more female CEOs and thus more women on boards.

Women in senior management tend to stick to the traditional roles of human resources or public relations rather than finance or operations — the areas CEOs are more likely to be chosen from. Doyle should know. She’s run traditionally male-dominated organisations, such as timber and steel mills, and it was that experience that led to her many board appointments.


Agenda for change
A lot of talented women simply opt out of competing for the CEO role, often because of the difficulties balancing that sort of time-consuming role with a family. Some prefer to run their own small companies where they can dictate more flexible hours.

Pumpkin Patch’s Greg Muir thinks women are not as tuned in as men in the “race to the top” and are simply more interested in the achievement of what they’re doing or in a job involving public good rather than status.

Some shy away from the public scrutiny that comes with the top job. Muir remembers media coverage of Gattung after a Telecom annual general meeting where what she was wearing drew comments. “No one ever commented on what I wore to an AGM,” he says (and that’s not due to his fashion sense).

ACC CEO Jan White says leadership styles have historically been defined in a way that made it more likely for men to progress but now a broader definition of what makes a successful leader should make it easier for women to rise up the ranks.

Although opposed to Sue Kedgley’s proposed bill on flexible hours, Business New Zealand’s Phil O’Reilly admits companies are not doing enough to make it easier for competent women to advance.
Just as there is no one cause of the problem, there isn’t one right answer, he says. His proposed solutions include Eileen Doyle’s suggestion that firms actively lift the aspirations of promising young female employees and encourage them into less traditional career paths that would see them advance more quickly. He favours companies putting in more effort, as the public sector has done with good results, and making it easier for women to progress in management once they have taken time out to have a family or if they return part time.

Given the skills shortage, some companies are already trying hard. Take IBM, led in New Zealand by CEO Katrina Troughton. The company’s diversity initiatives include flexible work rights, where staff can choose their own start and finish times or work part time; a Family Care Link, where information is provided on things like after-school care for homecare services for the elderly; and a Diversity Council focused on, well, diversity. Effort has gone into making it easier for men and women to return from parental leave and the company’s return rate is now 78%.

IBM also talks with tertiary students to try to influence young women to consider careers in science and technology. “Having an emerging pipeline is one of the key aspects to having impact at the other end,” Troughton says.

Joan Withers says she’s always felt just like “one of the blokes” on company boards though life as a CEO can be pretty tough, she admits. But come Sunday when she’s sitting at home sipping a glass of wine and reflecting, she thinks it’s all worth it. Having a “very nice salary” helps, she jokes. Her advice to other women is to chase the experience needed to advance. Don’t rely on the company to haul you up the ladder and, most of all, be tenacious.