The Human Rights Commission has commended the NZX on its updated Corporate Governance Code (NZX Code) that includes significant changes around the measurement of diversity.
The updated NZX Code, released today, is a significant step forward for corporate governance reporting requirements in New Zealand and will take effect from 1 October 2017.
Equal Employment Opportunities Commissioner Dr Jackie Blue says NZX should be commended for making changes that will hopefully in time address the low number of women currently on private sector boards.
“The number of women on boards in the private sector has remained stagnant at around 17 percent. strong and decisive action was always going to be required to bring that number up. The significant changes made to the code, particularly around how diversity is measured, sends a strong message that the status quo must change.”
Dr Blue says that while the focus of the updated code is geared towards measuring gender diversity in particular, companies should look at other diversity measures they can introduce.
“Requiring regular performance evaluation of action on diversity policies will see companies take a good hard look at how they are encouraging all types people to sit on their boards – regardless of their sex, ethnicity, age or disabilities.
“Greater diversity at board level is shown to have an incredibly positive impact on a business’ outcomes. Shareholders are very discerning and will be supportive of organisations that develop and deliver progressive policies.
“Smart and savvy companies are those that have started taking action towards increasing diversity around the board table already and are willing to comply with these new recommendations. Those companies who don’t comply will most likely fall behind what is being recognised globally as best practice and risk their future success.”