By Max Clarke
Lord Davies' report entitled Women on Boards has avoided the implementation of quotas unless the voluntary measures to double the number of women on FTSE boardrooms by 2013 fail.
This decision to avoid quotas has been largely welcomed by business, though for some, a quota system is seen as the only way to accelerate the required change. Comments in favour and in opposition of a quota system are presented.
Amanda Jobbins, CISCO's vice president of European technology and corporate marketing argues that quotas are the only way to achieve a more equitable gender ratio.
"The issue of quotas to compel UK business to increase the number of female directors on their boards in line with similar initiatives in Norway, France and Spain can only have a positive effect in my view.
“Over the last 10 years in the UK, Directorships held by women in the FTSE 100 have increased from 5.8% to 12.5% according to a study by Cranfield, however, at this rate the Equality and Human Rights Commission estimates that it will take 73 years before equal numbers of women and men are in the FTSE 100 Boardrooms!
“Traditionally, many women in senior positions have opposed quotas on the grounds that we should achieve seniority on the basis of our own merits, and while I wholly agree all roles should be appointed on merit, who is determining the definition of merit today? The male incumbents. Many studies show that hiring managers have a tendency to hire in their own likeness. We need quotas to accelerate the change.
“At Cisco in the UK we already have 40% of our UK board comprised of females and we are driving many diversity initiatives across the company. A key issue is the behavioral and mind set change required towards more flexible working environments that can leverage female talent. To change business recruiting and promotional trajectories to ensure companies have women at senior levels in the company, is simply going to take too long and there are many reasons, not least the ethical reason, to speed up that progress. Quotas will achieve that acceleration."
Helen Alexander, President of the Confederation of British Industry (CBI):
“A Government-set target for FTSE 100 directors would not reflect the different circumstances of individual companies. It should be for companies, not the Government, to set an appropriate target.
“The report contains good ideas to develop and sustain the talent pipeline to the boardroom, including harnessing the role of investors, executive search firms, and mentoring. The review has also been wise to avoid quotas, which would not have addressed the real issue of how we bring about a cultural change.”
Carmen Watson, one of the UK's most successful female business leaders as Managing Director of Pertemps Recruitment Partnership, a £280m turn over business and one of the UK'S largest independent recruitment agencies argues:
“I do not feel that boardroom quotas are the solution. Quotas are not inherently good because both men and women on boards both need to feel that the women have earned their way to the top. It is counterproductive if women are put on boards just to fill quotas, as the impact they will have on major company decisions to help shape and form company policy, will be diminished. That said, businesses should be held accountable for setting targets which are achievable and realistic for the marketplace in which they are operating. They then need to create frameworks and infrastructures which will help nurture and develop top female talent.
Jackie Orme, Chief Executive at the Chartered Institute for Personnel and Development (CIPD):
"We welcome Lord Davies' focus on a voluntary approach. His review marks the start of a process. It is the right start, but everyone involved in the governance of British firms now needs to step back and recognise that there needs to be a fundamental shift in established perceptions of what a great board member looks like. That is the only way we will ensure we get to and beyond the 20% target swiftly and in a sustainable way.
"That means far more than setting internal targets and filling them in a tick-box way. From my own experience in business, I know that a range of opinions, backgrounds and perspectives is always better than what is often referred to as 'group think'.
But I also know that we face a challenge to some severely entrenched attitudes in many boardrooms. I was once told a startling story by a woman who, being interviewed for a non- executive director role at a FTSE 100 firm, was told:
'Don't worry; we're not interviewing you because you're a woman.
We've already got one of those'. It is precisely that kind of tokenism and numbers game we need to avoid.
Nina Remer, consultant at specialist leadership consultancy Tyler Mangan said:
“At Tyler Mangan we welcome any decision to reject the imposition of statutory gender quotas. Whilst we appreciate that it is important to improve the gender diversity in the boardroom, we believe this should be an organic process as opposed to one forced upon companies.
“In our most recent management due diligence work we did not meet many female leaders at board level. Indeed the proportion of women in board posts is currently around 12.5 per cent, and whilst this is a big improvement from the 6.9 per cent representation of a decade ago, there is still a long way to go before parity is reached. Lord Davies indicates that companies themselves need to work harder to address this, and female leadership training may be just one of many ways to do so.