Oral Submission to the Governance and Administration Select Committee Against The Public Service Amendment Bill 2025

Kia ora koutou katoa Ms Belich and honourable committee members,

1.            I am Paul Thistoll, CEO of Rights Aotearoa. I appear before you today to deliver what I hope will be the most important testimony you hear on this Bill. I contend I am uniquely qualified to comment on this proposed legislation because I am both a human rights professional and the holder of a Master’s degree in business strategy, organisational science, and leadership from LBS - London Business School. This proposed legislation engages issues at the intersection of human rights and organisational strategy.

2.          I am very proud of having been accepted into LBS. It was an extremely competitive entry process, and completing the full-time taught degree onsite in London for a year was one of the most intense work periods of my life. I attended intimate talks from dozens of leaders and a few sports coaches – two I remember vividly were Paul McGinley – the European Ryder Cup captain, and Eddie Jones on how to build high-performing teams. I also had two professors — Herminia Ibarra and Ioannis Ioannou — whose world-leading work was groundbreaking and directly relevant to this bill.

3.          So now I sit before you, back in Aotearoa, a kiwi commenting on a proposed Bill which — in my opinion — represents one of the most catastrophically evidence-defying pieces of legislation ever proposed in New Zealand's history. I do not make this statement lightly. I make it based on decades of world-leading organisational research that this Bill completely ignores.

4.         The first and overarching reason that we should reject the Diversity, Equity and Inclusion (DEI)-destroying provisions of this bill is that they are based on an entirely false Premise.

5.         The Bill's proponents claim diversity undermines merit. This is demonstrably, empirically, categorically false. I will now present extremely strong evidence from London Business School - one of the world's premier business research institutions - that demonstrates the exact opposite.

6.         Professor Herminia Ibarra's Research: The Architecture of Exclusion: Professor Herminia Ibarra has spent 30 years documenting what she calls "second-generation bias" - the invisible barriers that prevent genuine meritocracy. Her research, published in Harvard Business Review and cited over 15,000 times, reveals that without DEI frameworks, organisations don't achieve merit-based selection. They achieve homogeneity through unconscious exclusion. Old white men exclude minorities unconsciously through patterns of behaviour.

7.          Consider her findings:

·       Senior leaders unconsciously sponsor protégés who remind them of themselves

·       Women receive 75% fewer high-visibility assignments critical for advancement

·       Performance criteria systematically favour stereotypically masculine traits

·       Without structured DEI interventions, informal networks exclude diverse talent

This isn't ideology. This is peer-reviewed, longitudinal research across thousands of organisations.

8.         Ibarra's concept of the "authenticity paradox" is particularly damning for this Bill. When marginalised people are told to "just be yourself" in workplaces designed for others, they face an impossible choice: conform and lose their identity, or remain authentic and be excluded. DEI frameworks resolve this paradox by broadening what leadership looks like.

9.         Removing these frameworks doesn't enhance merit - it restores the old boys' network. We end up with a public sector that looks like the Vienna Philharmonic – not the New York Phil. (Famously, the New York-based orchestra much more closely resembles the output of global and American music schools, whilst the Vienna-based orchestra looks more like our PM.)

10.     Professor Ioannis Ioannou's Research: The Performance Imperative: Now let me present Professor Ioannou's groundbreaking research on organisational performance. His 18-year longitudinal study, published in Management Science, tracked companies that adopted comprehensive ESG principles - of which DEI is a critical component.

11.        The results:

·       High Sustainability companies showed 4.8% higher annual returns

·       Superior return on assets and equity

·       Better operational efficiency

·       Greater resilience during economic downturns

Let me be crystal clear: organisations with strong DEI frameworks financially outperform those without them.

12.      This isn't correlation. Ioannou's research establishes causation through sophisticated econometric analysis. Companies in the top quartile for diversity show 36% higher profitability. While public service doesn't measure profit, equivalent gains in efficiency and effectiveness would transform government performance.

13.      The Bill's proposal to eliminate DEI is equivalent to a high-performing company suddenly abandoning its winning strategy. In the private sector, this would be considered managerial malpractice. Directors would be sued for breach of fiduciary duty.
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14.     ADDITIONAL EVIDENCE (Can refer to in questions)The McKinsey Evidence: McKinsey's 2023 "Diversity Matters Even More" report analysed 1,265 companies across 23 countries. Companies with gender-diverse executive teams were 39% more likely to outperform. For ethnic diversity, it's 36%. The penalty for homogeneity is growing every year.

15.      The Harvard Business Review Meta-Analysis: Thirty years of leadership research confirms:

·       Diverse teams make better decisions 87% of the time

·       Inclusive cultures show 39% lower turnover

·       22% higher productivity

·       17% better team performance

This is not one study. This is the convergence of thousands of studies across millions of data points.

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16.     International Disasters We're About to Repeat: Committee members, we have real-time evidence of what happens when governments eliminate DEI:

a.          United States Federal Government, 2025:

·       23% resignation rate among employees of colour within three months

·       78% of terminated DEI positions were women of colour

·       Service delivery failures spiked 34%

·       Constitutional crises and ongoing litigation

These aren't projections. This is happening right now. And you want to import this kind of disaster to New Zealand?

17.      The New Zealand Context: This Bill would:

·       Breach our Te Tiriti obligations requiring active protection of Māori interests

·       Violate international human rights treaties we've ratified, including CEDAW and ICCPR

·       Potentially trigger mass resignations costing hundreds of millions

·       Create legal chaos and years of litigation

·       Destroy public service capability for a generation

(The only government department in favour of this bill will be Crown Law, as they will be in demand managing legal actions against it).

18.     I would conservatively estimate the economic cost of this bill to be over 4 billion over the first 5 years of implementation. That's billion with a B.  How did I get this number? After subtracting direct transfers (like welfare/superann) and costs of debt financing, the total public sector OPEX spend is about 89 billion NZD a year. So imagine we lose just 2 per cent of productivity and efficiency on that number, and we have 3 per cent more staff turnover.

19.     (Extra detail for questions) That includes actual costs, and lost productivity, employee turnover, and efficiency losses and performance and organisational effectiveness hits. That's $250-500 million annually in turnover costs, $500 million in productivity losses, plus litigation and service delivery failures.

20.   As well as being qualified in business, I am a human rights professional and in terms of human rights, I tautoko the Human Rights Commission’s excellent written submission. I deeply support Dr Pacheco’s oral submission. This bill is both an organisational disaster area and a human rights nightmare. I am focussing on the organisational aspects for time reasons.

21.      So to bring this all together – in conclusion: Honourable Committee members, we need to acknowledge the Truth About Merit—true meritocracy cannot exist without mechanisms to identify and eliminate bias. When you remove DEI frameworks, you don't get merit-based selection. You get what Professor Ibarra calls "homophily" - people hiring people like themselves.

22.    The false choice between merit and diversity is a con. Excellence requires inclusion. Merit demands diversity. Every piece of credible research confirms this.

23.   This Bill represents wilful ignorance of overwhelming evidence. It's the policy equivalent of arguing the Earth is flat in the face of satellite imagery.

24.   If you proceed with this Bill, you will:

·       Destroy decades of progress

·       Waste billions of dollars

·       Harm vulnerable communities

·       Violate legal obligations

·       Ignore our domestic and international human rights obligations

·       Cripple public service effectiveness

·       Completely throw Te Tiriti o Waitangi out the window.

25.   So what would Eddie Jones say about this bill (LBS had rules about confidentiality, so I can’t repeat verbatim) – but based on what he has publicly said many times–he would say it’s a losing formula. His approach to building high-performance teams was categorically diverse, because there are always high-performing individuals available, but making them into a team is the hard part. He also consistently emphasises the importance of authenticity and psychological safety in his comments – DEI is critical to enabling these. His comments on psychological safety also mirror Google’s breaking work on what makes effective teams and organisations. Paul McGinley also emphasised the importance of psychological safety for teams – and he famously built an amazing team to win the Ryder Cup.

26.   So, honourable committee members, I contend that DEI is the winning formula for both rugby teams and the public service.

27.    Thank you for listening to me and tolerating my diversions but LBS did really make quite the progressive impression on me, and I hope I have persuaded the committee that removing the current DEI provisions is an absolute folly, and you must recommend those clauses of the bill be completely expunged before this bill goes to its next reading.