Diversity in totality: A study of

diversity disclosures by New Zealand

stock exchange listed companies
Ehtasham Ghauri, Mansi Mansi & Rakesh Pandey

Presented By:
Shahil Swar
Rahul Jayswal
INTRODUCTION

 Diversity word “Latin Origination” refers to variety,

mixture or mix.
 Study explores diversity reporting by New Zealand
Stock Exchange (NZX) listed companies.
 Analysis of the diversity-related disclosures made by
152 NZX listed companies.
 Organisational diversity – promote equality and to
eradicate discrimination within organisations.
 Gender Diversity & Deep Diversity (Sexual orientation,
disabilities, ethnicity, age and religion)
 Article portrays the emphasis only on gender diversity
thereby ignoring deep diversity.
Continued…

 Gender diversity and deep diversity (both are important)

 Diversity leading organisations toward growth and sound financial condition.
 Results from McKinsey analysis of 366 US and UK firms racially and
ethnically diverse organisations achieve more financial returns.
 New Zealand failed to achieve benefits and putting strategies of diversity.
 Organisations in NZ: A rich ground to
study diversity
 Organisations benefit-broadening diversity
 Diversity Works New Zealand (2016) says that
‘diversity goes well beyond simple ethnicity; it
is inclusive and embraces differences in gender,
sexuality, spirituality, ethnicity and age.
 However, Diversity Works NZ Report (least
importance to ethnicity, disability, sexuality
and religious beliefs)-absence of formal
diversity policy in organisations
 New Zealand organisations lacking diversity in
the organisations (not including the ethnic
minorities) E.g. Asian-Chinese, Maoris(Local
ethnic people)
 Continued..

 NZ organisations still lack diversity in terms of

ethnicity (low diversity in organisations
despite having multi ethnic groups in the
country)
 Ethnic minorities should be developed to
foster business and sound business
environment.
 Top executives should be developed locally
than importing executives from overseas.
Continued….

 Diversity (including women an old idea) still not seen in NZ companies or

corporate world.
 Combination of Legislative and corporate measure required.
 Report by Grant Thornton (2014), NZ women are more educated than their
predecessors
 Female representation going backwards
 NZX have shifted from older single-focus gender-based norms towards more
inclusive diversity management strategies.
Continued….
 This study explores the extent to which NZX organisations report on diversity
on their board, executive and operational levels.
 This study is interested in the content analysis of diversity disclosures
reported in NZX companies’ 2014 annual and sustainability reports.
 Data were collected from all 152 NZX listed companies’ reports - analysed
through a 30-item diversity disclosures index (DDI).
 This study provides evidence that NZX listed companies’ diversity disclosures
primarily relate to board gender diversity, while deep diversity elements are
ignored at all organisational levels.
Previous research on diversity and
diversity dimensions
 Diversity, according to UNESCO (2002), is the plurality of identities of groups
and is as essential to sustaining humankind as biodiversity is to sustaining
nature.
 Osman (1999) argues that the definition of diversity therefore needs to
accommodate refugees or asylum seekers in the developed nations.
Continued….

 Research has looked into various dimensions of diversity, that is, age, gender,
sexual orientation, disability and culture. (Herring 2009).
 Gender representation cannot be achieved without taking into account the
totality of diversity characteristic (Caped and Meak, 2007)
 The essence of diversity, therefore, is the cultural pluralism and inclusion of
various identities because such pluralism enhances social cohesion, creative
capacities and intellectual existence (UNESCO, 2002).
Gender mainstreaming
 Women's representation unable to move the organisations.
 The results from US organisations highlight that female representation at the
board level remains unchanged.
 Female representation in organisations has had to be enforced through
legislation and employment strategies in the UK, the EU and other countries.
 Equal opportunities for women guaranteed (combination of legal and
organisational approaches)
Deep diversity
 Minority groups face more challenges as compared with normative groups.
 Minority groups – disabled or LGBT
 People with disabilities as a minority group have been oppressed since
centuries or decades.
 Organisations incorporating LGBT into their diversity definitions are
increasing.
Continued….

 Organisations that included ‘sexual orientation’ in their diversity initiatives

were associated with a positive view and a helpful organisation for gays and
lesbians.
 Evidence suggests diversity broadens employees’ perspectives that facilitate
teamwork and problem resolution in an organisation .
Continued…

 Organisation including the diversity dimension of sexual orientation in its

diversity initiative encourages employees to disclose such information to their
organisation.
 Disclosures by employees and executives can be depressing in nature and may
make them vulnerable to discrimination.
Diversity and investors
 Organisation growth attract investors (web and investor related documents)
 Investors (keen to know the social responsibility practices of organisations of
interest to them)
 Investors acquire information: web / traditional documents
 Interest in an organisation’s workforce practices, gender representation and
inclusion of vulnerable groups is growing among investors.
Social Investing
 Social investing - concept that the investment community and stakeholders
are interested in other performance indicators and not only on financial
return
 Traditional financial disclosures – not enough to boost up the organisational
strengths and tackle weaknesses of a company.
Diversity disclosures in listed companies

 General disclosure and voluntary disclosure practise existence.

 Influence organisation’s human resources disclosures on areas such as
diversity.
 Voluntary disclosures risen.
 Organisations are stretching to publish separate reports on their voluntary
disclosures on areas such as CSR, diversity and social activities.
 Aided companies to gain financial gain, increased transparency and public
trust.
Continued…

 However, some studies have reported that diversity on an organisational

board does not relate to organisational performance.
 Organisations having minority group representation on their boards resulted in
higher market capitalisation and a more independent and gender-diverse
board.
 Diversity result in better corporate performance and reputation while
meeting stakeholder needs.
 Traditionally appointed directors: Failed diversity practise in the organisation
(Executive, operational, staff and strategies )
Theoretical perspective
 Traditional organisational recognised human organisations as closed systems.
 Organisations make necessary choices according to their interaction with the
social context.
 Change in environment makes compulsion for organisations to change
strategically.
 This study explores whether people from minority groups manage to make it
into three organisational levels, that is, organisations’ boards, executive
positions and operational positions.
Continued…
 According to Harris, board members from minority or underrepresented
groups bring in diverse cultural experiences, expertise and networks.
 Such practise put an organisation in a better position to deal with market
risks .
METHODS

 NZX listed companies are the samples used in this study

 A total of 136 annual reports and 13 sustainability reports were available for
2014
 First, diversity statistics were collected for gender representation at board,
executive and overall workforce of studied organization
 Secondly, through 30- item DDI companies were rated on a diversity scale
 For diversity disclosures, this study developed themes on the basis of
 the UN’s human rights definition on gender equality (UNHR, 2016a),
 cultural diversity (UNHR, 2016b), UN Guiding Principles (UNGP) on
 Business and Human Rights (UNHR, 2011), OECD Responsible Business
Continued….

 Conduct Guidelines (OECD, 2011), The Global Reporting Initiative

 ( GRI) framework, human resource management (Farndale et al., 2015;
 Gonzalez, 2013; Huffman, Watrous-Rodriguez, & King, 2008; Ozturk &
 Tatli, 2016), and the existing literature on diversity. Such information,
 along with the themes about minority groups from these documents,
 helped develop the DDI

 In addition to gender, the DDI included items related to disability, indigenous,

ethnicity,
 religion, migrants and age as well as sexual orientation. NZ-specific
 items such as ‘Treaty of Waitangi’ were also included in the DDI.
Results
 Analysis of data extracted from the DDI and annual reports
 30-item DDI were also analysed
Diversity scores based on the DDI:
Diversity Content

 Diversity practice of ANZ Banking, Genesis Energy, Telstra corporation & SKY Networks
 Diversity & Company’s Size

The results confirmed that larger companies disclose more

information on diversity as compared with their counterparts
Diversity With & Without Gender

This result suggests that NZ companies disclose more

information on gender diversity compared with other
diversities.
 Female Board Directors & Company’s
Overall Diversity

The results show that companies with boards

having greater gender diversity disclosed significantly more information
on other diversities than companies with boards having lesser gender
diversity. This result indicates that board gender diversity promotes other
diversities at the organizational level.
 Discussion

 Implementation of diversity related policies

 ANZ and Telstra, and these companies prepare a single annual report for both Australia and NZ, which is
predominantly targeted towards Australian stakeholders.
Limitations Suggesting Future Research

 It is acknowledged that the conceptualizations and the development of the

DDI items, upon which each organization was scored, may have alternative
explanations.
CONCLUSION

 Diversity in organizations is overshadowed by unifocal gender-based

approaches.
 sharing information on organizational diversity with stakeholders can help
organizations in improving their reputation, strengthening stakeholder
relationships and maintaining social license to operate.
THANK YOU!!!