By Cleo Thompson, Founder of The Gender Blog
This is the first in a series of articles which looks at how UK business is approaching the issue of women on boards.
In February 2011, Lord Davies of Abersoch released his long-awaited report, Women on Boards, a review of female representation at senior levels in UK plc. It was handed to the Department for Business, Innovation and Skills and sets out recommendations on targets to improve the gender balance in business. It stopped short of recommending the introduction of mandatory quotas (as already seen in Norway and Spain) but suggests that FTSE 100 companies should aim to have at least 25% female board member representation by 2015 – an increase from the 12.5% reported in 2010.
Other recommendations include the requirement for FTSE 350 companies to set their own targets on female representation, that companies should advertise non-executive board positions in order to encourage greater diversity in applications and that headhunting firms should draw up a voluntary code to address gender diversity.
A ‘missed opportunity’
The report’s publication was met with criticism from women’s campaigning group the Fawcett Society, which claims that the report was a “missed opportunity”.
“All the evidence shows positive action through the use of quotas is the only sure fire way to ensure more women reach the boardroom,” said Anna Bird, acting chief executive. “Government should set a deadline by which they will force boards to take action. Wishful thinking and encouraging words are not going to bring about the step change we urgently need.”
She said that making the senior hiring process voluntary “isn’t working” and that continuing the approach will exclude another generation of women “from the top table of business”.
The leaking pipeline
But what does the Davies review mean for mid-career point women working in UK companies? Do they care about it? Do they think it’s useful and will advance their careers or do they think it’s a waste of time?
The pipeline issue is still very much a problem, according to Marla Nelson, founder of WomEnterprise, for women working in middle as well as senior management also face career challenges.
“We still have a glass ceiling effect where it is difficult for women, firstly, to be paid on par with their male counterparts and, also, to achieve quite senior level positions,” she explained. “Now, without the women in those [roles], how on earth are we going to feed these women into board positions?”
Christina Ioannidis, international speaker and consultant and co-author of book Your Loss: How to Win Back Your Female Talent, which was referenced in the Davies review, agrees.
“Corporate women believe that the report was a nod in the right direction for the government, but the general feeling is that it did not go far enough. The lack of progress has led women to believe that true change will only come with legislation. But women do care about the Davies report and generally believe it has been a useful exercise.”
“Whilst I welcome the holistic view of the report and the recommendations for head-hunters, Chairmen and even shareholders, I believe that the report has not gone far enough in discussing and referring to the “bias, prejudice and stereotypical behaviour” which over a third (30%) of the respondents to the review believed were the biggest issue for women in moving up the corporate ranks. The onus should move to changing the attitudes of the leading population towards what women can and cannot do.”
Changing the culture club
Charlotte Sweeney, Head of Diversity & Inclusion, EMEA at Nomura PLC is clear that “There has been too much focus on the responses from corporates and not enough on what impact that will actually have on women in business….if any.”
She continues: “The focus should move from ‘fixing’ women to changing the corporate culture rhetoric. The way that work is defined and structured at the senior levels of a firm is not always as ‘modern thinking’ as it could be and doesn’t take into account the requirements of people with other responsibilities other than work, such as juggling corporate and personal life. A focus on corporate culture should look at how ‘work’ can be done differently at all levels to strengthen the pipeline to the top and how to get women into the executive roles which feed into the board position world.”
Sweeney also believes that many women think the Davies Review is an appropriate step in the right direction only IF corporates are held to account in the coming years.
And the issue of quotas seems to polarise the female population, an issue to be explored in the next article in this series and an observation also made by Carol Paterson Smith, the founder of website Alpha Female.
“The reception I am seeing from the AF community is mixed. The first group are frustrated at the prospect of quotas, because they feel it will discredit women who have earned their rightful place in the boardroom. On the other hand, some want quotas because they think that industry won’t implement meaningful change until it is absolutely forced to. Davies has hit upon a compromise – the threat of quotas if the inaction continues. But it remains to be seen if it will be sufficient to stir companies into action. In my view, the economic arguments re the potential link between more women in the boardroom and enhanced profitability and shareholder value are the way to go about this, because they are compelling. With women’s economic and social power increasing globally, it beggars belief that companies think they are capable of serving their client base well without representing them in senior management.”