Today over half of newly qualified accountants are female as are 25% of members of the ICAEW. Yet few reach the top executive roles in companies. So to see Alison Reed, FD of Marks & Spencer and one of the few remaining female finance directors in the FTSE100, included in the latest cull was a blow. Sadly she wasn’t alone – Laurel Powers-Freeling, CEO of M&S Money was included in the shuffle, as was Jean Tomlin, human resources director.
The low number of women on UK boards is not a new phenomenon. But while their representation has increased very slowly over the last decade, today only 3.7% of executive directors in the FTSE100 are women. Among non-executive directors, the imbalance is less extreme, but marked – just 11.8% are women.
The fundamental question is, of course, whether having an imbalance of gender on a board actually matters. It does – having experienced both, a board is just as imbalanced when it is made up of mostly women.
What is needed is a mix of perspectives to deal with a fast-changing world where both women and men make up the customer base. It’s just business sense. When the balance is mixed, male board directors have said women bring different perspectives and passion to business, in itself a positive contribution.
But we should not simply focus on numbers. Business needs to understand the barriers women face (that their male counterparts do not) and recognise the benefits of having a healthy, diverse board.
In his report on corporate governance, Derek Higgs identifies a strong link between good corporate governance and gender diversity in the boardroom. Women bring fresh perspectives and a different leadership to the table. As a rule, though not always, women encourage participation in power and seek to enhance the status of employees.
Women don’t tend to rely on hierarchy and position for power, as men often do, but rather use their personality, expertise and networks. As a result, women can be more effective motivators. This style of leadership is crucial in new or changing organisations. And as restructuring, cost-cutting and an emphasis on shareholder value becomes the norm, organisations need a different kind of leadership.
And yet there are several barriers that make it difficult for women to have an equal stake on boards. There is, for example, a belief among most male directors that, given time, women will ‘break through’. But if progress continues at current rates, the issue will never be resolved.
Many of our present board members also believe there are too few women qualified for the role. Yet most women in senior posts disagree. Dig beneath the surface and you find this manly concern conceals a mix of beliefs, including fears that the presence of women on boards would ‘upset’ their familiarity whether in the boardroom, in their networks or on the golf course. Put simply, many men want to keep certain areas of their life ‘women free’.
There’s also a feeling that women are not interested in board service. There will always be those who don’t want to serve on boards, and this includes men as well as women, but recent research from Catalyst sponsored by PricewaterhouseCoopers found that men and women (including those with children) report equal aspirations for the top roles. In fact, female executives, including those with accountancy backgrounds, are just as likely as their male colleagues to aspire to the CEO role.
But although ambition and advancement strategy (consistently exceeding performance expectations, successfully managing others and seeking high-visibility assignments) was the same, women still face a set of cultural barriers to their advancement. These include gender-based stereotypes, a lack of role models in the upper echelons of business and exclusion from informal networks.
It is true that women, as a rule, don’t tend to promote themselves and push themselves forward as much as their male counterparts, preferring to be asked. It boils down to a fundamental difference in approach. Whereas some men will have their successor in mind after six months in a role, women tend to focus more on doing a good job. It is precisely this difference that needs to be understood.
A common complaint from companies is that they can’t find women to be included in the pool of candidates when they recruit at board level. The Register of Executive and Non-Executive Women (Renew) has been set up as a headhunting service to UK businesses. Its objective is to build and develop a pool of capable women – who have board experience or potential for board service – and put them forward as candidates for board positions in both the private and public sector.
Renew’s advisory board is made up of experienced directors, chief executives and public servants. They include Fiona Driscoll, a director at Hedra plc, and Brian Patterson, chairman of the Irish Times and previously CEO of Wedgewood. Part of the board’s role is to ensure fair and impartial selection.
Renew specialises in women, but is not exclusive, and if men want to be added to the register, they simply follow the same process as the women to join.
We have used research to establish the kind of women and skills boards want – essentially candidates with leadership experience (although not necessarily in the corporate world) and an ability to see both long and short term. We have also spoken to women – both past and present members of top boards – to establish what helped them. We found, for example, that mentoring alone is no solution, nor is having a token woman on the board. We want to see more boards with a healthy balance of individuals – of both genders – who can provide business success.
Hilarie Owen is an author of leadership books, and founder of the register of executive and non-executive women (Renew).
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