Jobs: Firms encouraged to bring women on board

FIRMS have been called on to accept voluntary targets to get more women onto their boards.

Friday, 4th March 2011, 7:55 am

The Davies review called Women in the Boardroom wants 25 per cent of board seats to be occupied by females by 2015.

Jackie Orme, chief executive at the Chartered Institute of Personnel and Development (CIPD), said: “We welcome Lord Davies focus on a voluntary approach. His review marks the start of a process. It is the right start, but everyone involved in the governance of British firms now needs to step back and recognise that there needs to be a fundamental shift in established perceptions of what a great board member looks like. That is the only way we will ensure we get to and beyond the 20 per target swiftly and in a sustainable way.

“That means far more than setting internal targets and filling them in a tick-box way. From my own experience in business, I know that a range of opinions, backgrounds and perspectives is always better than what is often referred to as ‘group think’.

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“But I also know that we face a challenge to some severely entrenched attitudes in many boardrooms. I was once told a startling story by a woman who, being interviewed for a non-executive director role at a FTSE 100 firm, was told: ‘Don’t worry; we’re not interviewing you because you’re a woman. We’ve already got one of those’. It is precisely that kind of tokenism and numbers game we need to avoid.

“Meeting Lord Davies’ objectives must be about more than skirts on seats. It needs to be about a concerted challenge, lead by chairs of boards and headhunters themselves, to the established views of the skillset, background and range of experiences that make great board members. That board members should be appointed on merit is a truism – but the definitions of what constitutes ‘merit’ have been allowed to become too comfortable and too static – to the detriment of corporate performance.

“We need to get better at drawing from non-traditional sources – and the benefits of that approach will extend far beyond getting more women in the room. It holds out the prospect of generating a vibrant new generation of board members, capable of challenging orthodoxy, banishing group think, and generating more sustainable growth for their firms.

“Lord Davies has created a platform we can build on – but everyone involved in the governance of our biggest firms now needs to step up and play their part.”

The Institute of Directors (IOD) is pleased that the report does not recommend quotas.

Miles Templeman, director-general of the IoD, said: “We are pleased that the report stops short of advocating gender quotas for the boardroom. Quotas would have been incompatible with a meritocratic approach. However, it was unhelpful that Lord Davies did not rule out quotas once and for all. With only 11 per cent of the respondents to Lord Davies’ consultation – of which 88 per cent were women – supporting the idea of quotas, I question why he thinks the threat of quotas should remain.”

He added: “A greater diversity of people on boards in general is necessary, and this clearly means we need more female directors. The way to do this is to increase the pool of female senior executives from which directors can be recruited. Improving flexible working opportunities for aspiring female executives will be central, with companies rather than government taking the lead in creating these opportunities.

“We also believe that Lord Davies is right to argue that a combination of entrepreneurs, existing providers and individuals needs to come together to consolidate and improve the provision of training and development for potential board members. This is an area in which the IoD is ready to make a major contribution through its Chartered Director programme and other professional development activities.”

While women make up almost half of the UK workforce, they occupy just 12 percent of FTSE 100 directorships, according to Cranfield School of Management.

Liz Field, CEO of the Financial Skills Partnership, said, “A key argument for greater board diversity is that it increases a firm’s competitive advantage relative to those with less diversity. Greater diversity promotes a better understanding of the marketplace by matching the diversity of a firm’s directors to the diversity of potential customers and employees, thereby increasing its ability to penetrate markets. Given that women now have a major influence on purchase decisions it makes good business sense to increase diversity, particularly in those functions that are the profit-making parts of the business.”