Get women on the ladder; nevermind reaching the top
What does it say when the government sets up an inquiry into why there are so few women in boardrooms – and appoints a man to head it. Is that to prove the inquiry’s independence or is it because the committee wanted a proven company leader and most such leaders are male?
As Lord Davies, the former chairman and chief executive of Standard Chartered bank until he became a Labour minister, will find, it is a fact that women are under-represented in boardrooms. A quarter of FTSE 100 companies have no female directors at all: most of the others have only one – and she is almost certain to be a non-executive.
But is that a problem? And if so, for whom? For the companies, the economy or for women wanting to climb the corporate ladder?
It may be that nomination committees and headhunters are biased to making male appointments, in which case Davies needs to re-educate them both to their own potential loss and to the denial of opportunity to half the population. But it may be that few women are seeking to enter boardrooms, and while educating them on what they are missing might be within his remit, forcing part of the population to do something it does not want to, surely is not.
One main reason few women make it to the top is that few start at the bottom. For every girl taking GCSE economics last year there were five boys: business subjects showed a similar bias. Whether that is the girls’ choice or a bias in schools, that is where Davies should start.
In fact, women are well represented in the headhunting trade and, because most of those that make it into boardrooms are non-execs, nomination committees are well stocked with female directors too. If they are not promoting their own gender, maybe it is because there are too few suitable candidates wanting the jobs?
Norway led a move to quotas insisting women comprise 40 per cent of boards and has been followed by some other countries, but women cannot be conscripted: the result has been to stuff boards with female non-execs – with often the same women sitting on several boards.
David Cameron, who appointed Davies (and who heads a strongly-male cabinet), has suggested his own version of quotas by saying half of all long-lists for directorships would be female, with all board posts advertised to encourage applications from women, while companies where females are less than 30 per cent of the board would have to say why. Those are not the answers, however.
Nor is it that important to fill FTSE boardrooms with token women in non-exec non-jobs. They may be role models, but it is more important that if women want to be in business there is no barrier to stop them starting firms and joining big corporations at the bottom and moving up. Davies reckons that if business becomes more women-friendly, there would be 750,000 more small firms. That is important.
August 10th, 2010 at 10:38 am
Lord Davies’ review is good news. Anything that raises the issue of the under-representation of women on boards and makes the ‘business case’ for increasing the number of women in boardrooms can only be a good thing. I do wonder though what this review will uncover that hasn’t already been learnt by e.g. Cranfield School of Management’s yearly audit of women on FTSE100 boards? Maybe it’s time for action instead? Setting quotas for minimum % of women on boards or even something radical like changing school hours so that they are more compatible with full time work? At the Chartered Institute of Chartered Accountants, where I work as R&D manger, we are looking at the issue of under-represenation of women in senior roles in the traditionally male dominated industry of finance and accounting. We think there’s a lot that can be learnt from women who have made it (both from a practical and inspirational point of view) and more making the business case to employers for having women in senior roles. Finnish research found that organisations with female CEOs were on average 10% more profitable than ones with male CEOs. Now if that doesn’t make businesses listen, I don’t know what will.