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Let's inspire change, not impose it
What’s still stopping capable women progressing to board positions? It’s time for change, argues FIONA CANNON – but not with mandatory quotas.
According to the McKinsey report Women Matter, Gender Diversity, companies with more than three women on their boards have an 80 per cent higher return on equity. As if this isn’t reason enough for more businesses to tackle the issue of gender diversity head on, what about the need for a business to understand and represent its own diverse customer and client base?
It is understandable that some people are all for imposed quotas, but I firmly believe women need to be confident they’ve been recruited on their own merit. There is a danger that, with quotas, there will be a certain stigma attached to some appointments. Let’s first try to inspire a change in attitudes before forcing a change in practice.
Yes, there’s an element of “we’ve tried this before and nothing has changed”, but never has there been such widespread focus on the issue. Never have so many high-profile public figures spoken so candidly about the need for change.
Women represent 60 per cent of all university graduates in Europe and yet the levels of women on boards remain low, with little progress seen at all over the past five years. It strikes me that we’re at the point where we need to move from mentoring to more active sponsorship of those women by the most senior male executives.
By that I mean recommending women for roles, introducing them to their contacts and promoting them to others outside of the organisation. The Cranfield Report 2010 revealed that over half of FTSE 100 boards had no women on their boards.
Despite this, many companies in the UK will now have strong female representation at the socalled “marzipan” layer of their organisation. It is crucial that more focus is put upon understanding why the majority of these women aren’t progressing further.
Going forward, chairmen will need to take a more proactive role. The business-led initiative, The 30% Club, whose aims reflect those of Lord Davies’ report, demonstrates that there are a number of FTSE 100 Chairmen who already understand the value of diversity on boards and encourages other Chairmen to take action in this area. This feels likes the right place to start. Of course, it would be naïve to believe that this alone will be enough – we can all see how slow progress in this area has been.
Lord Davies’ recommendation that businesses should disclose the number of women on boards, alongside his suggested aspirational targets, is therefore important. It will mean that women themselves will be able to see which companies are serious about this issue and that may influence where talented women decide they want to work. It will also force boards to address the reality of their own numbers in a way which they may not have done previously.
There are plenty of board-ready women ready to make the next step. We now need to see businesses sharing ideas about how to ensure they get there. In a year’s time we want to be able to see evidence of today’s debate having changed the tide of opinion and see hard statistics to reflect that.
FIONA CANNON is Director of Diversity & Inclusion at Lloyds Banking Group.
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