Rule 10.4.5(j) provides only that issuers include in their
annual report a quantitative breakdown as to the gender mix on
their board and senior management team.
NZX has published a ruling requiring that the gender composition
be "reported numerically and not solely on a proportionate or
a percentage basis". At a minimum, this means disclosing:
the number of male and female directors
the number of male and female officers, and
in each case, comparative figures for the previous balance
NZX would prefer this information to be communicated in tabular
format with an explanation of how the definition of
"officer" applies in the organisation – either by
reference to reporting lines to the CEO or by describing the nature
of the roles included.
It is not compulsory to have a diversity policy and the
reporting requirement applies only to issuers on the Main Board.
Debt only issuers, and NZAX or NXT issuers, can choose to report or
not, as they wish.
Towards more meaningful diversity policies
The guidance note sets out what an effective diversity policy
might look like. It says that boilerplate language that offers
little or no insight into the company's approach should be
avoided and emphasises the importance of setting measurable
These might take the form of specific targets, such as:
to have X number or proportion of women directors by X
X percentage of new Board appointments to be women for X period
of time, and
X percentage of senior managers/officers to be women by X
NZX has also suggested a number of non-numerical objectives.
establishing a diversity working group or committee
establishing training programmes for employees on the benefits
of diversity or conducting surveys to obtain employees' views
establishing recruitment procedures to encourage diversity
ensuring there is pay equity at all levels of the organisation,
establishing a diversity scorecard.
And NZX provides examples of what a diversity policy might
a statement of the issuer's commitment to diversity and an
outline of the perceived benefits to the organisation
a requirement on the Board to set measurable performance
provision for a senior management team or officer to be
appointed with authority to lead the policy and accountability for
its successful implementation
a requirement for the Board to conduct regular reviews to
identify opportunities to improve diversity through succession
provision for a regular review of diversity metrics at all
levels of the organisation
regular training of Board and management in recruitment and
selection, with an emphasis on assessing merit and avoiding
programmes which encourage diversity - e.g. by supporting
work/life balance or enabling valued staff to maintain/resume their
a summary of the issuer's participation in wider diversity
initiatives or in organisations which promote diversity
a statement of the types of behaviour that will not be
tolerated and a reference to any associated whistle blower
a process for regular reporting to the Board on the
implementation of the diversity policy and progress achieved.
Chapman Tripp comments
We consider that this is a useful and welcome intervention by
NZX as the quality and transparency of diversity reporting to date
has been mixed and, in some cases, very poor.
NZX could also improve disclosure and provide a much clearer
overview of progress, both at the company level and across the
listed sector, if it made its own communications around this issue
fuller and more informative.
We would like to see NZX provide comparative datasets over time,
include a section on diversity reporting in the website overview
pages it maintains for each issuer, and greater qualitative
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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