Most Read Contributor in New Zealand, September 2016
The NZX has a tiger by the tail. Its proposed diversity listing
rules, released for consultation in March and since
adopted, pending FMA approval, have created a momentum for
change which has the potential to transform our corporate
The formation of the "25 Percent Group", dedicated to
increasing women's representation on New Zealand boards to 25%
by 2015, virtually guarantees that. It's an ambitious target
– more than doubling the number of woman directors within
two and a half years - but the Group is well-positioned to achieve
it as its 12 founding members have a lot of reach and
They also have history on their side. It is clear from the
public response to the NZX's proposals that this is an idea
whose time has come.
On every available measure, New Zealand's rate of
participation for women in the top echelons of the corporate sector
We came dead last in a 14 country comparison by the Human Rights
Commission in 2010 of the percentage of NZX top 100 companies with
women on their boards and on the proportion of board seats held by
women, scoring 43% and 9.32% respectively.
Next worst was Australia on 53.5% and 10%. But Australia has
since lifted its game, having increased the presence of women
directors from 10% to 12.7% since ASX brought in gender diversity
rules on 1 January 2011. So when - 15 months later - the NZX
proposed similar but more modest amendments to its disclosure rules
the only real questions were why so long and do the changes go far
This is especially so as the NZX discussion paper quotes
"credible research based evidence" to suggest that
diversity in general and gender diversity in particular contributes
to improved performance and "promotes diversity of thought
which stimulates more innovative problem solving and may promote
identification and better management of risk".
Deloitte in a commentary on two major US studies, both of which
found that the more women a company has in its leadership the
better it is likely to perform across almost all indices, noted
that neither study was actually able to argue a direct and causal
link to explain the correlation. So Deloitte hazarded its own
interpretation of the results, as follows:
"The story is not about the increased representation of a
particular demographic group bringing extra 'sparkle' to
the workplace because of their special skills and talents. Rather,
the story is about organisations with a more diverse talent pool,
especially at senior levels, manifesting a workplace culture of
openness, merit and rational decision-making. At heart the story is
one of diversity and inclusion of all employees, so that a richer
knowledge bank is fully leveraged and better business outcomes are
Let me acknowledge at this point that Chapman Tripp's record
on the promotion of women is no cause for complacency. Women
comprise 15% of our partnership and 31% of our board and senior
management. But since 2007 we have had a programme –
Women@CT – to address this and we have made, and are
continuing to make, measurable progress.
So what has the NZX done and how does it measure up against the
task at hand?
It is inserting into Rule 10.5.5 two new requirements:
a requirement on issuers to include in their annual report a
quantitative breakdown as to the gender composition of the board
and officers, including comparative figures for the previous year,
a statement from the board, where the company has a diversity
policy, as to how it is measuring up with respect to that
These changes fall short of the ASX provisions which not only
require ASX members to establish a diversity policy but also to
disclose the contents of that policy and to include in it
"measurable objectives for achieving gender diversity and for
the board to assess annually both the objectives and progress in
Chapman Tripp considers that the ASX approach is better because
it requires a more holistic, serious and integrated response.
ASX's emphasis on qualitative rather than quantitative measures
underlines that diversity is an ongoing exercise with no end point
and also recognises that companies (and even industries) will be
starting from different positions and will need to develop policies
which reflect their specific circumstances.
The NZX, by contrast, is introducing what is in essence a head
count test that could be satisfied by a couple of token
appointments. And the NZX's unwillingness to require (rather
than suggest) that members develop a diversity policy will provide
the laggards with an escape clause.
These qualifications aside, however, it is a definite step in
the right direction and the emergence of the 25% Group should
ensure that real change is achieved.
The information in this article is for informative purposes
only and should not be relied on as legal advice. Please contact
Chapman Tripp for advice tailored to your situation.
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The Hon'ble High Court of Bombay has held that where a Scheme of Amalgamation is executed between two companies registered in two different states [...], then the said two orders are two independent instruments.
Lawyers are pretty good at figuring it out quietly and amicably among themselves, without recourse to a public courtroom.
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