Diversity Debate – Women on Boards?

Posted on: August 31, 2012

The other day there was a piece about the lack of women on UK Boards in the Evening Standard

http://www.standard.co.uk/news/uk/boardroom-doors-are-still-closed-for-women-8084093.html

The key points were that:

  • Not one woman has joined the board of any of Britain’s biggest companies in the past year
  • In the past two years, of 87 executive appointments only four were women (source: Boardwatch)
  • Britain’s largest companies were asked to ensure that at least a quarter of their directors were women within four years (Report: Women on Boards report by Lord Davies of Abersoch, February 2011)
  • The proportion of women directors at FTSE 100 companies has risen from 12.5% to 16.7% since the Davies report. However, only 6.5% of full time executive roles are held by women (up by just 1%).

USA and Hong Kong are slightly better than the UK and Italy and Japan fare worse. This issue has been rumbling on for some time. Many have pointed to other European countries (e.g. Norway) where there is a legal requirement and the EU is considering quotas for women on boards. There’s an interesting video interview on the topic from Reuters http://uk.reuters.com/video/2012/03/08/can-quotas-help-women-pry-open-boardroom?videoId=231397628 – where Mervyn Davies stresses the benefits of diversity but argues against quotas.

I have worked with employment lawyers who have some interesting explanations and possible solutions to the problem – see, for example, comments from Richard Woodman at Royds http://www.royds.com/wp-content/uploads/2011/03/The-London-Business-Adviser-Spring-2011-Issue-1.pdf

I wonder if the picture is the same at smaller companies? Information on the http://www.prowess.org.uk website is as follows:

  • When the UK Government’s first national strategy for women’s enterprise was published in 2003, it was estimated that women constituted around 27% of self-employed people in the UK, and that only 12-14% of businesses were majority-owned by women (compared to 28% in the USA).  By 2009 that figure had increased to 29% of the self-employed in the UK and 15% (or 700,000) of the 4.8 million enterprises in the UK were majority-led by women. (GROWE Greater Return on Women’s Enterprise. Women’s Enterprise Task Force 2009)
  • 48% of female entrepreneurs own businesses in the service sector, compared with 36% of male entrepreneurs (A Strategic Framework for Women’s Enterprise, Small Business Service, 2003)

The professions (lawyers, accountants and surveyors) have made great progress at balancing their intake across the genders, although the figures would show a continuing imbalance at more senior levels (some argue that it will take time for the more balanced intake to reach seniority).

With ABS in the legal sector allowing structures beyond the traditional partnership model, it may be that they can lead the way with a more representative spread on their boards. Yet accountants and surveyors who have this flexibility already don’t seem to have done so.

As a senior woman in business, I can’t really understand the reluctance of businesses to appoint their best people (a fair proportion of which must be women) to their Boards. I can only wonder whether it is the women themselves who are reluctant to put themselves forward?

I can see the benefits for the women themselves and for the businesses – but what, if any, are the downsides?

 

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