Execs See UK Companies Gradually Embracing Gender Balance
The Financial Times recently hosted a discussion with Royal Bank of Scotland chairman Sir Philip Hampton, PwC chairman Ian Powell, Mentoring Foundation chief executive Peninah Thomson, and former trade minister Lord Davies, author of the report that has a lit a fire under UK companies on the issue of boardroom diversity. The group talked about the progress that FTSE companies have made – and how far they have yet to go.
- The Davies Report recommends that women should have 1 in 4 board positions by the year 2015
- In the year since the Davies Report was released, the percentage of female board directors in the FTSE 100 has risen from 12.5% to 15%
- In the FTSE 250, women hold less than 10% of board positions (and almost half of those companies have 0 female directors on their boards)
- Women made up 26% of new non-executive director appointments to the FTSE 100 last year, but they only took 9% of new executive positions
“Stanford, Harvard, Cranfield, McKinsey – they all say the same thing. Employee engagement and board diversity have an impact. I would argue that without diversity then you could have an executive team where no one challenges the chief executive in a slightly different way.” — Lord Davies
Although Lord Davies suggested in his report that if companies don’t reach targets on their own, quotas may be on the horizon, that is generally considered to be a last resort.
“I have yet to meet a woman who wants to join a board as part of a quota,” said Sir Philip. But he also emphasized that at his company they strive to ensure that women are considered anytime a senior position opens.
Ian Powell said, “We won’t put people in positions they aren’t right for because it’s hugely damaging for their career,” pointing out that it’s important to have the right pipeline for female talent.
“One thing that came out of the research was that if you ask a man if he can do a non-executive job he’ll say ‘of course!’. Women are more hesitant.” — Lord Davies
In discussing what companies can do to be proactive, Ian Powell brought up the importance of setting targets. “At the moment 14 per cent of our partners are women,” said Powell. “Our target is 20 per cent. It gives you something to shoot at.” Many UK companies are developing their own strategies.
- Shell has a development program for women
- Vodafone has managers include an additional woman on their teams each year
- The Mentoring Foundation connects senior management with talented women from various industries through a cross-company program that it runs
- And Lord Davies pointed out that “Childcare allowance needs to be looked at”
“An effort has been made by opinion formers to set a climate for change, but we need more role models. Women are more reticent about stepping into a role with increased profile and visibility.” — Peninah Thomson
The participants were largely optimistic that UK corporations are catching up to the importance of including more women in their top ranks — especially since diversity is in their own financial best interest. As a recent report by McKinsey found, companies with gender-balanced boards are more profitable than those with all-male boards.
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