Females boost returns - study
Increasing the number of women on a board could up a company's financial performance.
Increasing the number of women on a board could up a company’s financial performance.
University of Waikato Institute for Business Research director Stuart Locke says an analysis of ten years of NZX companies’ data indicated the link.
New rules proposed by the New Zealand Exchange will require all publicly listed companies to declare exactly who sits on their board; stating how many women and minorities they have as directors and in senior roles.
While the average percentage of women on public sector boards is 41%, the average percentage of women on NZX top 100 boards is far lower – 9.3%.
Dr Locke said New Zealand did not rank well globally based on NZX figures, despite the high number of women university graduates.
“Most companies seem to ignore the talent available and their shareholders pay the price.”
The recent change of rules by the Australia Stock Exchange led to a 50% jump in female representation on boards in less than two years. The Australian policy recommends publicly listed companies have a gender diversity policy. The New Zealand proposal calls for it to be mandatory and includes ethnic diversity as well as gender diversity.
But Dr Locke said the business boost was not common to all cultures.
“Take Sri Lanka for example; female directors are often spouses of the business owner and only there so the business can distribute income at a lower marginal tax rate – they’re not expected to know anything about the business.”
He said their lack of input was recognised by the local courts, who did not hold them accountable for any decision making.
Charlotte Woodfield
Wed, 21 Sep 2011
Wed, 21 Sep 2011
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Females boost returns - study
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