The New Zealand Stock Exchange has just decided to implement a gender diversity reporting rule for all publicly listed companies. The NZX announcement has been reported in several business papers today including NZHerald and DominionPost. The decision requires companies to report the gender composition of their board and senior executive and, subject to FMA approval, will become effective on 31 December 2012.
Gender reporting is a good move in my opinion—albeit a very small one because companies already report the names of their directors in their annual reports. A reporting system is a far better option than a quota system. Quota systems run the very real risk of tokenism and making-up-the-numbers, neither of which contribute to effective governance. In contrast, a reporting system will simply make the composition of boards plain. I'm hoping it will improve governance effectiveness and ultimately company performance. Time will tell.
No doubt the move will also provide a platform for lobby groups to exert pressure where they see fit. It will be interesting to see what develops in the 2013 reporting season and beyond!
Thoughts on corporate governance, strategy and effective board practice; our place in the world; and, other things that catch my attention.