So, it’s 2015 and the year is beginning to accelerate. Time to give some thought to what was promised for women’s representation in UK boardrooms by 2015. In publishing his review of women on boards in 2011, Lord Davies said this: “FTSE 100 boards should aim for a minimum of 25% female representation by 2015 and we expect that many will achieve a higher figure.
Fast forward to late February 2015 and how are we doing? Well, we can tell from figures published in the Guardian last October that ‘60% of Britain’s top firms have still to reach the government target for female directors’. In Autumn 2014, 61 FTSE 100 companies still hadn’t met the 25% female representation target set by Lord Davies. Given that, it seems unlikely that what Lord Davies had pushed for and advocated in his 2011 statement will bear fruit this year.
We can but hope but the 25% female representation goal across all FTSE 100 boards does not appear to be a particularly robust reality. Nevertheless, the 30% Club – founded and chaired by the dynamic Helena Morrissey, CEO of Newton Investment and mother of nine children – does feel that this could be possible (see quote below). Let’s hope so! That could only be good news all around.
‘The good news is that the goal set by Lord Davies to have 25% of women directors on FTSE 100 boards by the end of 2015 is within reach. Given the current rate of director turnover and proportion of new appointments going to women, the year end outcome will lie somewhere between Lord Davies’ target and the 30% Club’s slightly more ambitious one’.
Meanwhile, a Harvard Business Review article published just this week ‘Women Directors Change How Boards Work’ – authored by Laura Liswood, Secretary General, Council of Women World Leaders – tells us, crushingly, that the United States ‘seems to have hit a ceiling of about 16% women’ when it comes to the representation of women in the boardroom. This statistic sits glumly alongside the HBR article’s opening remarks.
‘We know that getting more women on teams can boost performance …. And increasing the number of women on a team also increases its collective intelligence’
For some hope and in order to tap a richer vein of reference, Liswood looks to Norway which boasts (since late 2003) a mandatory quota system of 40% on the boards of publicly limited liability companies. Early feedback following this move is now showing the value of having at least three women on a board is important.
In her article, Liswood also seeks insights into the Norwegian example from Professor Aaron A Dhir, an associate professor of York University’s Osgoode Hall Law School in the US. His forthcoming 2015 book ‘Challenging Boardroom Homogeneity; Corporate Law, Governance and Diversity looked deeply into the experiences of 23 Norwegian directors, men and women who had appointments both pre- and post-quota. From this work, Dhir then goes on to identify seven consequences of gender-based heterogeneity for boardroom work, board governance, and group dynamics. These are:
– Enhanced dialogue
– Better decision-making, including the value of dissent
– More effective risk mitigation and crisis management
– Better balance between risk-welcoming and risk aversion behaviour
– Higher quality monitoring of and guidance to management
– Positive changes to the boardroom environment and culture
– More orderly and systematic board work
– Positive changes in the behaviour of men
In a final statement on his findings in Norway, Professor Dhir tells us that his findings do indicate that:
‘the forced repopulation of board governance systems along gender lines has disturbed the traditional order of corporate board governance systems, dislocating established hierarchies of power and privilege in key market-based institutions’.
In other words, it can be done, but it’s going to be painful. No surprise there! But we need to bust through the pain barrier to come out the other side and begin to reap the benefits of far more balanced gender representation in today’s leading boardrooms across the world.
Clearly, reaching fair and balanced representation of women in boardrooms is unlilkely to be entirely achievable in 2015 but we need to keep the whole drive and thrust for this vital initiative moving forward. Boardrooms with heavily biased male representation need to become an anachronism in the not too distant future!