Diversity and Discrimination......

I am strongly in support of diversity on Boards of Directors. 

The broader the spectrum of the commercial world that can be accommodated in the governance function, the more reflective of society, consumers, and stakeholders, the market’s corporate entities become.

But let me offer a caveat following the recent announcement that the New Zealand Government intends to mandate public sector Boards consist of 50% women by 2021.

Appointments to a Board should be driven by merit and not by a fixed quota. 

By default, this quota proposal means that public sector Boards should consist of 50% men also – otherwise there is a clear risk of discrimination against men.

The concept of gender diversity is sound – but no more so than ethnic, religious, political, sexual orientation, educational, or socio-economic class diversity.

Why should female gender diversity be awarded special treatment by being provided with a quota system at the expense of other diversity factors? This could theoretically be construed as discrimination against gay, Pakeha, working-class, Catholic, graduates who vote National - or pick and mix any chosen diversity factors to suit!

Or do we anticipate meeting all diversity factors equally when establishing board selection criteria?

Good luck with that!

Quota systems in any sphere of human endeavour simply do not work to create optimum stakeholder outcomes. In the sporting area, every conversation with South African friends and colleagues on the subject of poor Springbok results inevitably leads back to criticism of the quota system. 

But back to the Board appointments issue. 

Perhaps if the list of those Directors noted as willing to serve in the public sector consisted 50% men and women equally, there would be a prima facie case for public sector Boards reflecting this gender distribution. 

However, any gatherings of such souls I attended while on the Southern Response Earthquake Services Board were far from 50/50.

And Southern Response is a case in point, as my replacement – a woman – had skills, competencies, and experience adjudged to be more appropriate than mine and more relevant to the organisation’s needs. 

No issue with that at all – but under the proposed quota system – 50% female, 50% male, the replacement appointment would not have been permitted as the Board already boasted three wonderful, competent, intelligent, and very able women! The replacement Director’s skill, competency, and experience would have been rendered irrelevant and the Board would have been deprived of the most suitable candidate for the position. Make sense? I don’t think so.

Board diversity is an important and relevant factor and it should be left to the shareholders and the Board of Directors to address the issue relative to the corporate entity’s circumstances.

Beware the Springbok effect!

The Laird