Women on European Boards: Are We Seeing Progress?
By Michelle Hendelman
At the recent Women’s Forum Global Meeting in Deauville, France, the percentage of women on European boards was an important topic of conversation among the 30+ CEOs gathered at the annual conference. Now in its 8th year, this forum brings together CEOs from across the globe to have a candid discussion about the issues surrounding women’s career advancement.
In conjunction with the forum, EY (formerly Ernst & Young) presented what they believe to be five critical factors to influence change in the boardroom as featured in their report, “Time for Change: Recruiting for Europe’s Boards.”
“Our research suggests that European boards lack diversity as they are locked into a small pool of talent and are constrained by the fundamental requirements for board positions. Recruitment processes used to fill Europe’s boardrooms need to change to broaden the base of experience and skills on company boards,” says Julie Teigland, EY’s EMEIA Accounts Leader.
This begs the question whether or not CEOs and corporate boards are genuinely concerned with increasing the number of women because of the well-documented business benefits or if these efforts are geared toward fulfilling increasingly stringent mandates from The European Commission.
While some countries like Norway have already imposed gender quotas for corporate boards, The European Commission is pushing that four out of every ten non-executive directors of large publicly listed companies in Europe be female by 2020. However, each European country affected by these mandates is progressing at different rates as acceptance levels of women in senior level positions are certainly not uniform. Finland, for example, reported in 2012 that women comprise 22 percent of listed companies’ board members, whereas Italy, France, and the UK have experienced slightly less progress.
One of the most common arguments posed by companies coming under fire for their lack of women on boards is that qualified women are hard to find, even though reports suggest that the leaky pipeline argument is becoming less and less applicable.
EY suggests several ways to address this issue including changes to the recruitment process that would include using headhunters in order to penetrate the often closed networks of board succession. According to Dr. Christine Stimpel, Partner, Heidrick & Struggles, “The DAX [German share index] community is tightly knit and appoints those whom it already knows from other institutions. Executive Search mostly gets involved if the firm’s board is less well connected, or if there is a need for diversity candidates.” By opening up the recruitment process, companies should have a wider talent pool to choose from, including many board-ready women.
Creating a Strategic Plan
In some cases, according to EY, companies may need to be more strategic when appointing new board members. To this end, they suggest using a board secretariat to search for talented and qualified individuals. EY points out one successful database of “board-ready” women currently managed by the Financial Times Non-Executive Director’s Club. According to EY, “This Global Board-Ready Women database allows companies to search more than 8,000 highly qualified women who are ready to take up a board-level position. The Association of Executive Search Consultants also gives enhanced access to people on this database to its headhunting community.” This hardly sounds like a pipeline problem.
The recruiting process in boardrooms, according to Teigland, is changing but at a sluggish pace. She advises corporate boardrooms to ask themselves one simple question, “Is this risk and compliance issue, or is it about realizing the business benefits that come from engaging a more diverse range of individuals?” This kind of introspection, she hopes, will simulate organizations to keep pace with the changing realities of business.
