This study explores the changing gender diversity trends on New Zealand corporate boards. A literature review presents domestic and international governance diversity statistics, as well as a thorough summary of the research into the commercial benefits of board diversity and the identified barriers and solutions (on both the supply and demand sides) to achieving it.
Methodology
In order to measure the trends in gender diversity on governance boards in New Zealand the following methodology has been used:
Data Collection: In order to track the trends in female board participation, board composition data from the annual returns of companies listed on the New Zealand Stock Exchange was utilized. Trends over the period 2003-2013 were measured by recording the changing gender mix on listed companies through the 11 year period. The Market Capitalization of each of the sample companies as at 1 November 2013 was retrieved from the New Zealand Stock Exchange website. The total number of directors and the number of female directors was recorded, with percentages then calculated.
The incidence of director changes and replacements through the sample period was also recorded. Information regarding the gender mix of membership was also retrieved from the Institute of Directors and the Springboard group.
Sample Population: The sample was drawn from the top 50 companies listed on the New Zealand Stock Exchange (NZX). In order to appropriately track long term trends, only companies with Annual Returns data lodged with the Companies Office every year from 2003 to 2013 were studied. This sampling methodology yielded 34 sample companies.
Data Analysis:
a. Trends in the occurrence of female directorships: The data from the annual returns from each of the sample companies was tabulated in spreadsheet form to track the number and percentage of male and female directors on each of the sample boards over the decade between 2003 and 2013. These findings were then graphed and examined for trends.
b. Market Capitalization and board gender diversity: Regression analysis was used to examine the relationship between Market Capitalization and the number of Female Directors on each board, both in terms of the average for each board over the sample time frame, and for the actual number of female directors on each board in 2013.
c. Patterns of change with respect to board gender diversity In addition to the quantitative analysis of directorship changes, the nature of director replacement has been recorded. Eight possible scenarios that were identified and measured:
1. Retirement male, replaced by male
2. Retirement male, replaced by female
3. Retirement female, replaced by female
4. Retirement female, replaced by male
5. New position added, filled by female
6. New position added, filled by male
7. Female director retired, not replaced
8. Male director retired, not replaced
Rationale For The Research Method: This methodology was chosen because complete, consistent and reliable data was available from independent sources. Rich data over an appropriate time frame was available from the online annual returns filed with the Companies Office of New Zealand, and via the New Zealand Stock Exchange. Since the purpose of the research was to track actual numeric trends, the quantitative method was most appropriate.
The method has allowed for the long term trends of gender diversity on board to be accurately tracked over a suitable time period, and is therefore the optimum choice for this research.