Why more board level women must be good for business
Three industry bodies have joined in broadly welcoming the findings and recommendations in the Davies Review’s Improving Gender Balance on British Boards.
Petra Wilton, CMI’s director of strategy and external affairs, says that business will continue to benefit as it raises its targets to increase the number of women it appoints to board-level roles.
“FTSE 100 companies are waking up to the fact that diversity in the boardroom is very good for business.
“We’ve hit Lord Davies’s first target but there are many more milestones before we reach genuine gender balance in board-level roles. All listed companies must step up to the next challenge of increasing the number of women holding executive directorships and CEO roles.
“This needs to be a voluntary initiative; just parachuting women into board roles will not lead to sustainable changes at the top. Companies must adopt measures to unblock the talent pipeline that prevents all too many women from aspiring to and achieving the biggest roles in business.”
CBI gives a nod
CBI Interim Chief Policy Director Matthew Fell, said: “Lord Davies’ latest report shows that businesses understand the value of harnessing all available talent. The UK’s voluntary approach is working, so it’s right that this report sets business a stretching new voluntary target.
“Businesses must now keep up the momentum by continuing to work on building the talent pipeline, increasing the representation of women in executive roles and narrowing the gender pay gap.
“UK companies want to continue leading on this agenda, but the Government can do more to help by extending free childcare, promoting the benefits of flexible working and tackling occupational stereotypes in schools.”
CIPD on board too
The CIPD said “Today’s announcement that we’ve reached female board representation targets in the FTSE 100 is great news and a historical moment for the UK workforce. It’s important to keep the momentum going – a very small number of women make up these figures so companies could quickly lose gains. Lord Davies’ suggestion of increasing the voluntary target for women on boards to at least 33% by 2020 and expand to the FTSE 350, is therefore a welcome next step. The long term goal shouldn’t be anything but 50%, and we’ve seen plenty of support in the HR profession for this, but it’s about the steady, effective process in which it’s achieved.
“However, the bad news today is that the proportion of female executive directors remains below 10%, with just eight more women in those positions across FTSE 100 companies since 2011. Non-executive directors cannot change the culture of organisations on their own. All efforts so far towards achieving gender diversity will be for nothing if organisations don’t understand how crucial the visibility of female executive directors – those actively involved in the day-to-day decision-making and strategy creation – is to make a real, long-lasting difference. We’re pleased to see a focus on executive directors in Lord Davies’ long term aims, but what gets measured gets managed so we’re urging the Government to introduce a separate, voluntary target for female executive directors at FTSE 100 firms of at least 20% by 2020.
“For now, employers now need to take up the gauntlet and turbo charge their plans for sustainable, long term change in their organisations. This is particularly crucial for those yet to take part – they need to be in catch-up mode, learning from the experience of those who’ve been pioneers in the space, before they fall behind their competitors.”
3 key steps for encouraging gender diversity:
- Build a strong, internal talent pipeline. Women should be able to earn their way to the top in the same way as men, but employers need to remove the barriers that stop them from getting there. This involves monitoring the gender profile of the entire workforce and understanding what those obstacles are, in order to create clear channels which allow women to reach the top.
- Invest in the development of the talent you already have. Gender diversity makes good business sense, as women bring different perspectives and experiences, and evidence shows that companies with balanced boards often outperform male-dominated competitors. Organisations therefore need to accept gender diversity as part of their long-term business strategy and implement initiatives such as ‘Think, Act, Report’ in order to encourage women already in the workforce to progress to these positions.
- Don’t fix women, fix the culture. Boardroom diversity is not a numbers game and leadership is wider than gender. Organisations need to have the long-term aim of fixing their culture to make it more open and inclusive, rather than expecting women to adapt and fit in. That way, you’re showing that everyone can be a leader, whatever level they’re at and whatever their personal identity. This supportive and inclusive culture will be crucial as diversity broadens out and we move further into the twenty-first century.