Balancing the Boardroom in the UK
Breaking the glass ceiling is not a new initiative. For years we have scratched our heads, wondering why more women don’t make it into senior management positions. We have been told that women lack ambition, leadership skills and would rather raise children. We’ve heard that boardrooms are old boy’s networks and that if you’re not willing to play golf or tennis you will not be successful.
But cracks are beginning to appear in the glass ceiling and these tired stereotypes are being overturned. Women are claiming senior leadership positions across Europe in an unprecedented wave. An atmosphere of post-financial crash introversion led to a wider dialogue around board effectiveness. Enter Viviane Reding, vice-president of the European Commission, whose message is simple: no woman should get a job simply because she is a woman and, at the same time, no woman should be denied a job simply because she is a woman. Reding has proved to be a major catalyst in placing diversity at the forefront of board governance conversations; her threat of EU-wide gender quotas for publicly listed companies made all interested parties pay attention.
“We are not trying to get more women on boards, we are trying to create the 21st century board governance,” says Candace Johnson, founder of Global Board Ready Women, a collaboration of business schools and professional networks intended to create a database of leading female talent.
The British government took a stance against quotas and commissioned Lord Mervyn Davies, the former chairman of Standard Chartered, to write his landmark report ‘Women on Boards’ in 2011. Businesses were encouraged to hit 25% of female board directors by 2015, otherwise change may be enforced. The proportion of FTSE100 board seats occupied by women has risen from 12.5% in 2011 to 20.7% today. Between October 2013 and March 2014 35.5% of all FTSE100 appointments were female. One of the recommendations of the Davies report was the creation of a Voluntary Code of Conduct for executive search firms, which was drafted by a collection of executive search firms (link to the Voluntary Code – maybe a box-out with a further explanation). The existence of the Voluntary Code and this year’s government-backed review by Charlotte Sweeney identified executive search firms as central to the future of diverse boards.
Subtle drivers of change
The challenge for executive search firms is that there is only a finite amount of board-ready talent. The ultimate objective has to be to address the pipeline of female talent, which search firms can assist their clients with, but cannot drive. A symptom of government involvement is a short-termism aimed at a target. In order to meet this objective search firms have adjusted their behaviors to broaden the talent pool, questioning the definitions of assignments that may have previously led to an unconscious male bias. The most cited example is the interpretation of the term ‘board experience’; if this is taken to mean a search for candidates already on boards it inevitably maintains the status quo, but if it means identifying individuals with board exposure, the talent pool becomes much wider. “Chairmen were frustrated with having the same candidates put forward,” says Helena Morrissey, chief executive of Newton Investment Management and founder of The 30% Club, a network of chairmen and CEOs committed to business-led change. “Since 2011 we have had more of a focus on intrinsic capabilities rather than exact fit. Search firms have done a good job and there is a business opportunity here for those firms that grasp it.”