"As we approach the 6 month review date outlined in the February 2011 Lord Davies report, it is a good time to evaluate progress."
Feb 2011There are some very encouraging signs, especially in FTSE 100’s and high profile companies. Currently, women make up around 30% of new appointments in this group of companies. However there has been much less change in the composition of FTSE 350 and AIM companies – and there is little evidence to suggest that this is changing.
FTSE 100 companies were already at 12.5% female representation on their boards, compared with just 7.8% in the FTSE 250, and it is likely that this gap will widen significantly over the next year unless there is radical change.
These figures really blow apart the “lack of supply” argument which claims there are insufficient women who have the right experience and skill set. If that was true then logically it would be even more difficult for larger companies to make female board appointments and the figures would be reversed.
If you read the press then you could be forgiven for thinking this is not the case and thinking there is a lack of talent and experience.
On the contrary, there are hundreds of highly capable women who possess the skills and experience required to be effective and successful Executive and Non-executive directors in our largest companies.
To the huge irritation of all senior women, much of the comment in the media still focuses on what women have to do to improve their skills. But competence is not at the root of the problem. The real issue is that the recruitment selection process has been weighted against women for several generations – and it is this that needs to change.
Quotas would ensure that this wealth of talent is used and not ignored.
Many senior women didn’t think quotas were necessary due to the risk of tokenism, but 20 years on from becoming Directors, and with this glacial rate of change, many have changed their views and decided enough is enough. As the Davies report makes clear, what gets targeted and measured gets done in business.
The public sector has tackled the diversity issue very successfully and businesses must now take this agenda seriously and get their houses in order. Targets, transparency and accountability are the holy trinity of change.
In the words of one well known Chairman, “the trouble with you women is you think it’s a level playing field when in fact we are all tipping it in our direction or off playing on another pitch!”
Men do deals – they do them constantly with each other and they are usually single minded about getting what they want.
So the purpose of quotas is to ensure some balance in the process. The argument that this would lead to tokenism would hold true if this was entirely a supply side issue, but as Lord Davies makes clear, there is a demand issue. There is a wealth of female talent available which is being ignored and wasted.
Companies, the economy and society will all benefit as there is clear evidence correlating women with good business practice. Women are good at managing risk, excellent at engaging stakeholders and deliver consistent long-term growth. Evidence also demonstrates that they take more considered risks and that boardroom balance is good for business health. Too much testosterone and competition is unhelpful and gets in the way of quality decisions. Investors in particular should welcome this and pay close attention to company reporting and board appointments, as recommended by the report.
We also need to find creative solutions to some inbuilt gender traits. Women find it hard to be as good at self promotion as men, but they are brilliant at promoting others and so the solution is to partner them to promote each other and for enlightened men to sponsor them into roles.
The executive search code of practice has now agreed to incorporate a 30% target on female candidates. Hopefully this will translate into shortlists and appointments but we have to wait and see. Senior women are now more likely to be long-listed by search firms but the power still sits with the Chairman to influence both the shortlist and the final appointment. A shortlist will have several people who have the experience and track record to do the role, so the final selection is always down to “chemistry”. The idea that there is only ever one perfect candidate and that the process is entirely logical and unbiased is a fiction. Despite the huge emphasis on the nominations committee in corporate reporting, in reality it is usually the Chairman that makes the decision and many do not respond well to high-powered women. Until they do we are left at a road block.
The language used to describe the same characteristics for men and women is still different, and these words are loaded with prejudicial judgement. This needs to be constantly challenged until everyone starts using the same words for high-powered women as they do for their male counterparts. Formidable equals impressive, opinionated equals clear thinking. Pushy equals ambitious. Impatient equals incisive. Emotional equals passionate.
So, in summary, while there has been progress, many companies still need scrutiny, challenge and a sharp focus to embrace the Davies report and deliver real change.