Board of Underrepresentation?
04 March 2011
Last week saw the release of Lord Davies’ report, Women on Boards. The publication of this long-awaited review of female presence on the UK’s corporate boards brought with it some staggering figures. One of the most widely reported facts was that only 12.5% of corporate board members of FTSE 100 companies in 2010 were women. An even more alarming statistic - cited in the report’s opening paragraph - is that at the current rate of change, 70 years will pass before gender-balanced boards are achieved in the UK. Confronted with numbers such as these, few could argue that the visibility of women at board level in the UK is progressing at an acceptable pace.
So are these findings a slap in the face for diversity campaigners or a slap on the wrist for FTSE 100 companies? Reaction to Lord Davies’ investigation has been mixed. There’s been disappointment - as demonstrated by Nicola Horlick (or ‘city superwoman’ and ‘mum-to-six’ as she is also known by the media) with her calls for legally binding quotas. But it has also been enthusiastically welcomed by those optimistic that the report’s recommendations will lead to significant change without accusations of tokenism or favouritism.
The recommendations made by Lord Davies include that UK FTSE 100 companies aim for at least 25% representation of women on their boards by 2015; that listed companies develop and implement a policy, with measurable objectives, relating to gender diversity in the boardroom; that boards must announce their gender diversity goals by September this year and be in a position to report the number, and roles, of the women in their organisations; and finally, that board appointments and their recruitment be more transparent.
Regardless of one’s opinion as to whether these recommendations go far enough (and fast enough) in attempting to combat gender inequality in UK boardrooms, they are at least a step in the right direction.
However, Women in Boards reveals a much deeper and more complex issue relating to women and employment, especially in the knowledge economy. The report highlights that a woman’s educational achievements are not necessarily being translated into employment success. It shows that despite women in Europe and the US representing six out of ten university graduates on average, and forming 46% of the UK’s economically active workforce, men hold 941 out of 1,076 directorships in FTSE 100 companies. Women, on the other hand, occupy only 135.
How can this severe disconnect be explained? Reasons cited in the report include the male corporate environment, uniquely gendered mentoring which favours male development and gender behavioural traits.
A lack of visible female role models in the corporate world also proved to be an issue, despite their prevalence in other professions such as the media or the public sector. In fact, the newly announced appointment of Bronwyn Hill to the post of permanent secretary at Defra, means that half of 16 government home departments are now headed up by women.
Sadly, there are few signs of this welcome shift being mirrored the corporate sphere. The Work Foundation’s Knowledge Workers and Knowledge Work survey appears to support this finding. When looking at the share of women in jobs by knowledge content, the report found that 78%, 75%, and 58% of women work as care and welfare workers, information handlers and servers and sellers respectively, while only 44% of women work as experts and 44% as innovators. Furthermore, where the former occupations involve some knowledge tasks, the latter – including the target audience of Lord Davies’ report rely on a significantly higher degree of knowledge based work.
Only time will tell as to the success of Women on Boards’ recommendations. Lord Davies’ report has not followed the sturdy route taken by the likes of Norway, Spain and Iceland with imposed quotas or equality legislation. But it has perhaps achieved something more nuanced and, in the long run, potentially less damaging to women’s overall goal of equality based purely on skill and business acumen by making a strong and convincing business case for board diversity. Whether it is men or women, young or old - business veterans or budding entrepreneurs - business thrives on diversity and dynamism. One hopes, therefore, that FTSE 100 corporate boards will begin to clear space at the boardroom table for these valuable individuals - women included.
Annie Peate works in the Ideopolis programme