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NZ Europeans make up 80% of business leaders, survey shows

Friday 18th October 2019

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A major survey of 113,000 employees at 39 different Kiwi firms has found less than 20 percent of leaders surveyed were not New Zealand Europeans. 

This year is the first that corporate collective Champions for Change could extract meaningful ethnic leadership data from its annual diversity survey after too few employees responded to the first one. 

The group’s co-chair, Westpac chief executive David McLean, said while the data need improvement “it is clear there are low levels of Maori and Pacific people coming through to leadership level.” 

The research showed how ethnic diversity was limited at more senior levels. While 80 percent of board members in the collective identified as NZ European, they only made up about 60 percent of the non-manager group. New Zealand's working-age population is about 65 percent NZ European.  

McLean identified two problems with the survey - disclosing race wasn't compulsory and it was also difficult for people to answer because there were multiple options. 

However, researchers were able to capture data from 78 percent of employees involved in the survey. 

The collective of banks, professional service firms and NZX-listed companies don’t have a specific commitment to ethnic diversity, whereas it does commit to gender diversity. Its members advocate for a 40:40:20 split, meaning 40 percent men, 40 percent women, 20 percent of any gender.

Only two members - Fonterra and Air New Zealand - state explicit ethnic diversity goals in the report. The dairy giant aims to have 20 percent of its senior leadership roles filled by ethnic minorities by 2022; the airline’s target is to have 20 percent Maori and Pacific leadership by the same date. 

The research also found organisations within the collective are more gender diverse than their NZX counterparts. 

While member organisations include an average of 37.3 percent women on their boards, that contrasts with a 47.4 percent female make-up of state sector boards. However, the figure outperforms the 25.8 percent board make-up found in Australia’s general equality scorecard and 30.2 percent in the FTSE 100. 

Bell Gully, Fonterra, Foodstuffs North Island, KPMG and NZ Rugby all have fewer than 20 percent females on their board, while ACC and Transpower have the most women with 62.5 percent. 

Champions for Change said 20 of its companies would voluntarily sign up to release their gender pay gaps in a new pilot to use a standardised methodology. 

Westpac and Fonterra are among firms in the collective that already report their gender pay gaps, with the bank’s at 30.3 percent and the dairy cooperative's at 2 percent. The national average was 9.2 percent.

McLean said he hopes research will encourage other companies to join the collective, but stopped short of saying it should be compulsory. 

“I’m always reluctant with mandatory rules but for an individual organisation, it is important they measure their own situation because unless you measure it how are you going to address it?” he said.

“What we are trying to do at Westpac is use a blunt instrument to overcome institutional bias.” 

Champions for Change is coordinated by the Global Women group. Firms must pay a $500 annual fee to join. 


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