Just how diverse are New Zealand listed companies?
The very notion of organisational diversity is to promote equality and to remove discrimination within organisations. Diversity goes further than gender and includes class, sexual orientation, disabilities, age, religion and ethnicity. And it matters:
- Studies have shown that greater diversity enhances organisation profitability and financial performance.
- People of European ethnicity dominate the board tables and executive positions in New Zealand companies, but this group will shrink as a proportion of the population with foreseeable demographic changes.
For both these reasons it is important for New Zealand companies to develop and include a more diverse talent pool.
Otago Polytechnic Applied Management lecturer Ehtasham Ghauri collaborated with researchers at the University of Otago to study diversity in New Zealand companies. The researchers analysed the publicly available 2014 annual and sustainability reports from NZX listed companies. They developed a 30-item diversity disclosures index (DDI) which rated companies on the information they provided on diversity practices. Of the 136 companies studied, only 28 disclosed that they had measurable objectives to achieve diversity. Only four companies achieved a DDI score of 20 and above - two of these have a single annual report for both New Zealand and Australia, where they are required to report on gender statistics. The research also showed that companies with greater female representation around the board table were more diverse in other ways as well.
These findings provide insight for companies and NZX regulators to devise measures that emphasise the totality of diversity as well as helping to achieve gender diversity objectives.
Image credit: Steven Depolo, used under Creative Commons licence CC BY 2.0