Improving Gender Balance in the UK's Boardrooms
Lord Davies has given the FTSE 350 companies a two year deadline to make voluntary changes in the boardroom or face government quotas.
So over the next few years, one in three board appointments must be women, - that equates to 135 females being hired for senior board roles. Shockingly the number of non-exec and executive director women on FTSE 100 companies has stayed around 12%, and within this ratio a large percentage of them are American.
“Inclusive and diverse boards are more likely to be effective boards” says Lord Davies.
The statistics are out there, showing that companies with more women on their boards out perform their rivals with 42% higher return on sales. A 66% higher return on invested capital and a 53% higher return on equity.
“It really saddens me that there are still underlying prejudices against women. I am not a feminist and as I say, I believe in meritocracy, but sometimes you have to create rules initially, in order to give certain sections of society a chance” says Nicola Horlick, Bramdean.
But why are American companies historically better at recognising women in boardrooms than we are in the UK? Harriet Green, who started out as a trainee at Macro, a semiconductor distributor and is now on the Board of Emerson, believes that “If we don’t raise our game and harness the talent that exists, the next generation of business leaders will simply look overseas. I have lived and worked on four continents and can testify first hand to the amazing opportunities that exist globally – irrespective of gender. I now sit on the Board of Emerson, and previously I worked for many years for a large American-owned business. Their focus is ‘the best person for the job’ – the idea of a Davies report in the US would be a nonsense and some of my American colleagues are quizzical as to why the UK lags so far behind”.
Is it modesty and less ambition that keep out women in leadership roles?
What is holding women back? Why are there so few women in British boardrooms? Experts believe a principal reason for women’s lower ambition is that men are more likely to define their success in terms of work achievement, while for women other factors, such as raising a family play a far bigger role. Also some women may have their ambitions limited by worries about whether they can succeed in a male-dominated workplace and by a greater innate aversion to risk taking. Times clearly need to change and Harriet Green commented that “the notion expressed of ‘a career woman’ used to imply that one had to give up everything to succeed – but that’s just not the case. Technology has enabled much greater flexibility for all of us and I, and all of the senior women I work with, are able to balance everyday life, family and work”.