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NZ Institute of Directors: ‘Cast a wide net to find the best people for the board’

Divina Paredes | June 23, 2016
Boards should be setting their own diversity policies, appropriate targets and declare this in their annual reports, says IoD CEO Simon Arcus

The IoD guide lists the following five practical steps:

Create an inclusive culture: "The board sets the tone for the culture of the organisation. An effective board champions debate, diversity, thoughtful challenge and dissent."

Recognise and address unconscious bias: The guide cites in the late 70s, the top five orchestras in the United States had fewer than 5 per cent women members. Today, they make up over 30 per cent. Blind auditions were introduced in the early rounds of recruitment.

Review board composition: "Get the right mix of people and avoid a compliance or tick-box approach...It is about building a board that considers diverse perspectives in discussion and decision making to add greater value to the business."

Identify and appoint diverse talent: "Cast a wide net to find the best people on board." Look beyond traditional sources of potential directors such as lawyers, chief executives and accountants. "Consider candidates that have business acumen and core director capabilities but who also have diverse skills, experience and attributes."

Set targets and measure progress: The guide notes an improvement at a macro level on gender diversity. It cites women now make up 43 per cent of people on state sector boards, which is close to the government's 45 per cent target. Women comprised 17 per cent of directors on NZX listed companies last year, up from 12 per cent in 2013, when NZX required the boards to report on the gender breakdown of directors and officers in annual reports.

Sidebar: Tips for identifying and appointing diverse talent

  • Skills first: Recruit on the basis of merit and capacity.
  • Establish a proper process for appointments and benchmark all candidates.
  • Ensure nomination committees and interview panels have at least one woman on them.
  • Ensure transparency in board selection and appointment processes.
  • Ask for CVs without names, gender, age, ethnicity, residential addresses and other personal identifying information to help reduce bias.
  • Do not accept short-lists with a lack of diverse candidates, have a process for returning to the market for further candidates.
  • Periodically advertise board positions to encourage greater diversity in applications.
  • Provide appropriate support for the candidates.
  • Seek the advice of search firms and ensure they have a commitment to diversity.

Institute of Directors CEO Simon Arcus and National List MP Alfred Ngaro at the Mentoring for Diversity programme held at The Cube, ASB Bank Building.

Source: CIO New Zealand 

 

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