By Daniel Hunter
The topic of women on boards has been firmly in the spotlight ever since Lord Davies published his report.
And yesterday (Thursday) the Confederation for British Industry's president, Sir Roger Carr, wrote he remains utterly convinced that better decision-making does result from greater board diversity.
In a letter to the Daily Telegraph he said the following:
On International Women's Day, it is worth reflecting on the progress being made to increase the number of women on company boards.
There's no doubt that Lord Davies' report on boardroom diversity turbo-charged the speed from glacial to that of a brisk walk — but we still need to quicken the pace.
I'm pleased to say that around 100 new appointees to boards in the UK last year were female, nudging-up the percentage of women on boards from 12pc to 15pc. But although this is progress, it falls short of the target Lord Davies set for business a year ago. Should we be concerned?
While I don't believe we should correlate financial performance with female board membership, I remain utterly convinced that better decision-making does result from greater board diversity.
It is evident that this message is starting to penetrate the FTSE 100, and in the past 12 months more chairs have openly stated their commitment to boardroom diversity. And I want to be very clear — the entry ticket into boardrooms remains merit — gender is added value.
From my own experience, a mixed gender board is simply a better place to be — better atmospherics, improved dynamics — more representative of employees, customers or shareholders. It's just a lot healthier.
The active involvement of head hunters has already started to make a difference. Long lists of women are more readily available than ever before. Not just the superstars of today, but also the less-known and equally talented stars of tomorrow. And there is more encouragement for women than ever before. Networking organisations, like the 30% Club and the Professional Boards Forum, are increasingly visible, providing valuable guidance and support.
But perhaps, most importantly, we've seen businesses commit to taking a long, hard look at the way they recruit, mentor and succession plan to remove blockages in the pipeline of female talent to the board.
So, if it's all going so well, what are the challenges, what more can be done and, importantly, by whom? I have a four-point plan.
Firstly, we must build momentum in the debate. We need a chain reaction of head hunters, networking organisations, CEOs, chairmen, shareholders and women — all working together with vigour, commitment and purpose to accelerate the pace. If the focus diminishes and the pace slackens, firms will not achieve Lord Davies' voluntary target of 25pc by 2015 and the risk of legislation will increase.
Introducing a quota for women on boards is not the right solution. Quotas simply don't tackle the root causes of the issue and take no account of the different pipeline challenges faced by different companies. The construction of boards that are fit for purpose with an appropriate mix of skills, nationalities and gender is best achieved by engaged chairmen, willingly responding to the spirit of a code, rather than grudgingly obeying the letter of the law.
Quotas will always be perceived as tokenism and would be a setback for women leaders and for business.
Secondly — the pipeline must be expanded. Firms must focus on the changes needed in attitude, culture and practice to ensure they're drawing on the best talent available. Working out exactly how they do this will take time. But it's about widening criteria in succession planning and making subtle changes to the values applied in performance management and promotion rounds. It's also about well thought out maternity returner programmes and tailored training, networking and mentoring support.
And it's about CEOs working hard to develop and encourage women in executive roles by adjusting working practices and eliminating corporate prejudice, to help them to stay the course and enter the boardrooms as operational managers — not simply non-executive portfolio directors. CEOs need to be clear that this is about developing more effective, more successful businesses, not only boardroom pipelines or diversity for its own sake.
Thirdly, shareholders must play their part. Changes to the corporate governance code coming into force in October offer a prime opportunity for shareholders to emphasise that diversity is not an optional extra.
Shareholders must emphasise that boardroom composition is firmly on their radar and failure by management to respond, will dilute their appetite for investment in a company that doesn't acknowledge and act on diversity.
Finally, chairmen must create the right climate. Finding and selecting women for board seats is the easy part. Ensuring all board members are supportive, engaged and committed to their success on appointment, is vital. As is making a new member feel welcome and valued — particularly a woman alone.
We should remember that Women on Boards is not about corporate fashion, a political whim or boardroom social engineering. It is about harvesting a rich seam of talent, building competitive edge and making British business better.
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