New Zealand prepared to mandate female board directors within private companies

New Zealand prepared to mandate female board directors within private companies

Jacinda Ardern
You could never accuse the New Zealand Government of doing things by halves.

According to a new policy pledge, all state boards and committees will be gender equal by 2021 having already reached 46 percent at the end of 2017.

And, last week their Minister for Women, Julie Anne Genter said the government would be prepared to force private companies to do the same; imposing quotas to ensure equal representation of women at the board level.

A gutsy move, given women comprise just 19 percent of board directorships presently.

“We’re awaiting the next report, and I’m keen to see where they get to,” Genter told Television New Zealand’s Q+A program on Sunday.

“If they’re not going to make progress, if it’s going to sit there at 19 per cent, then we might have to start thinking about ways government can incentivise them.”

The NZ government– currently led by the youngest-ever female Prime Minister Jacinda Ardern– is committed to fast tracking equal gender representation and the eradication of the gender pay gap.

Genter said a range of tools and methods were at the government’s disposal to “incentivise” private businesses to adapt, including imposing quotas.

“The evidence is mixed on how successful that is,” she said. “Quotas in some places have been successful, but they also can have perverse consequences. So what I would say is let’s start by putting up the challenge.”

In Australia, the notion of quotas is still a contentious topic, and not one supported by the present government.

In May this year, Prime Minister Malcolm Turnbull scoffed at the possibility of enforcing quotas at the party level, saying pre-selections were decided by the party membership and the Liberals were a “grassroots” organisation.

“I don’t think a quota system can work in a grassroots political system,” he said. “Everyone calls for democracy in politics. You can’t have it both ways.”

Meanwhile, across private companies, Australia still has a long way to go. Women currently make up 27.7 percent of board positions, according to the Australian Institute of Company Directors.

A soft target led by lobby group, The 30% Club exists, but there is nothing but social pressure driving private organisations to comply.

Although reluctant to mandate gender quotas, Australian Institute of Company Directors (AICD) chairman Elizabeth Proust, conceded last year it may be the only way to level the playing field.

“Quotas are not on the table for now, but clearly all options will need to be considered,”  she said.

“If we’re not able to see genuinely diverse boards, then governments are likely to take action.”

It seems a conclusion already reached by New Zealand.

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