By Cleo Thompson (London), founder of The Gender Blog
This is the next in our series of articles which looks at how UK business is approaching the issue of women on boards.
According to a recent survey by executive recruiters Harvey Nash, 81% of women feel that bias in the appointment process has a major impact on female representation – but two-thirds (64%) do not support legal quotas.
Instead, respondents cited education and awareness as the single biggest opportunity for improving boardroom balance (44%), followed by published targets and regular reporting (40%). Eighty-four percent of women believe they personally need to do more to achieve a higher representation on the board.
It appears from the survey, conducted of 365 male and female board level and senior executives, that the majority of women in business want to be taken seriously for their expertise and not simply be viewed as having “won” a place on the board through a mandated quota, an observation with which Charlotte Sweeney, Head of Diversity & Inclusion, EMEA at Nomura PLC agreed. She said, “Women want to be appointed into roles because they are the best person for the role, not because they are a woman.”
However, a minority of women (36%) believed quotas should be put in place and this is a growing and vocal segment of women in business and politics, led by the Fawcett Society. They recently called for gender quotas, with Acting Chief Executive Anna Bird arguing that “In politics, business and public life more generally, decisions which affect us all are being made with too few women in the room. If the government is serious about increasing the number of women on boards, and so sharing these positions of great power and influence more fairly between women and men, quotas are the way to do it.”
No to quotas – for now
This year’s publication of the long-awaited Davies report, Women on Boards, a review of female representation at senior levels in UK plc, set out recommendations on targets to improve the gender balance in business but stopped short of recommending the introduction of mandatory quotas. Professor Susan Vinnicombe, a member of the review’s steering board, described in the Financial Times why they took this stance, explaining:
“In the Davies report, we did not go for quotas because we feel we need to reform the whole system of choosing women directors,” she says. She argues instead for greater transparency in recruitment and promotion practices, citing the differences between senior female representation in the public and private sectors as evidence. In most developed countries, between 35 and 40 per cent of public sector directors are female – far higher (with the exception of Norway) than in the private sector in those countries. Prof Vinnicombe believes this can be partly explained by the fact the public sector uses more open procedures in recruitment and promotion than the private sector, where she describes senior appointment processes as ‘deeply secretive’.”
Other commentators on the Davies review have agreed on the initial stance around quotas. When leading barrister and philanthropist Cherie Blair QC was asked if she was a “fan of quotas,” she replied, “It depends for what. When the Davies report came out, I looked at it carefully and thought it was realistic: research shows you need about 30 per cent to make a difference. I don’t know whether [voluntary pressure] will work, but if at the end of three years it’s not working, at least you can say we tried.”
The business response
Harvey Nash’s research amongst individuals is mirrored by a survey undertaken by Search Consultancy, which found that two-thirds of companies are against the idea of bringing in quotas to boost female numbers in senior positions, with the majority of UK businesses saying they disapprove of calls to have fixed or voluntary gender quotas on boards. Thirteen per cent of the 200 small and medium-sized employers said that Lord Davies’ target of 25 per cent of boardroom posts to be filled by women was right, in addition to 14 per cent maintaining that it is too low. Grahame Caswell of Search Consultancy said that while some companies have now appointed female directors, not all agree with quotas.
“What’s significant about our findings is that businesses across the country simply aren’t backing the concept of quotas per se,” he said. “This is very different from saying they don’t advocate smashing the glass ceiling, but rather they don’t believe FTSE companies should be subjected to playing a numbers game.”
Is legislation looming?
Nevertheless, although the Economist recently described quotas as “the wrong way to promote women” and continued “mandatory quotas do more harm than good”, employers’ body the Confederation of British Industry recently warned that the introduction of mandatory quotas will come about if voluntary gender targets are not met.
The business group has urged UK businesses to set voluntary targets to increase the number of women in senior boardroom positions or face mandatory quotas from Europe. Under the proposals, companies would be able to set their own targets based on their sector and size, and show that they are doing all they can to improve the situation. However, if companies do not show that they are working towards a significant increase, they could be forced to meet gender diversity quotas set by the European Union. It is expected that, should mandatory quotas be introduced, businesses could be made to appoint women to at least 40 per cent of boards by 2020.
The CBI’s warning comes ahead of the closing date of the Financial Reporting Council’s (FRC) consultation on changes to the Corporate Governance Code, which would force companies to publish their policy on boardroom gender diversity and report on it annually.