• It's still a man's world

    It's still a man's world

    It’s jobs for the boys as usual at the top of British business, according to a damning new report from the Equality and Human Rights commission published this week. It finds that “the appointment process remains opaque and subjective, being driven by male-dominated corporate elites who tend to favour those with similar characteristics to themselves”.

    In 2011 the Davies Review into the paltry number of women on boards – at the time only 12% of directors of FTSE 100 were female - promised to end so-called “mini-me recruiting” (where Chairmen only hire directors in their own image) and challenged business to have boards which were 25% female by 2016. But the Equality quango’s recent investigation into the appointment process, particularly the practices of Executive Search Firms or Head Hunters, reveals that progress has been “slight” with companies dragging their feet on implementing the reforms the Davies Review recommended.

    There has been an “incremental increase” in the number of women on boards (from 12.5% to 14.2%) with 21 new appointments overall but “the pace of change was too slow for the targets suggested by the Davies Review to be met. Based on the current rate of change women would account for only 18% of board members by 2013 (rather than the recommended 20%) and only 21.4% by 2015 (instead of 23.5%).” Only 33 FTSE 100 companies and 17 FTSE 250 companies had set targets for gender diversity on Boards as Davies required and less than a third of FTSE 100 companies discovsed the number of women on their boards (only 22% for FTSE 250 companies). Only around half of top companies had the recommended boardroom diversity policy but only 20% had, as Davies requested, made their Board appointment process and how it addresses gender in particular, transparent. “This suggests a relative disconnect betweeh the abstract intention of tackling diversity and the concrete Board appointment practices among FTSE 350 companies”. Indeed.

    The Equality quango tasked Cranfield’s International Centre for Women Leaders to examine the corporate Board appointment process and the role that executive search firms play. It found that at present rates of progress “it will take more than 80 years to achieve gender-balanced Boards of directors on the UK FTSE 100”. Cranfield found that contrary to common perceptions – particularly amongst men - that there are simply not enough qualified women to take up such positions, “a plethora of research actually suggest that persistent gender stereotypes create biased judgments about the competence of potential or actual female board directors or about their suitability for top roles… the assumption that women lack sufficient qualifications is a simplistic and inaccurate explanation for the gender imbalance.”

    Indeed, when they looked at existing women directors they found they were better qualified than their male peers “more likely to hold MBA degrees, to have experience of multiple sectors (private, public, voluntary, governmental) and to have international experience”. This they said “was due to the fact that gender stereoptypes cast doubt on women’s ability to succeed in typically male roles, women must provide unambiguous proof of competence in order to be considered as competent as men.” This they found to be “a double standard”. And contrary to male director perceptions, Cranfield identified a pipeline of 2,551 suitably qualified women who were currently sitting either on Boards or at the executive committee level just below who would be perfectly qualified to be Non Executive Directors elsewhere.

    Interestingly when they asked women what the obstacles were to being appointed, they didn’t mention the lack of qualified candidates (as the men did) but “the prevalence of closed traditional networks in the appointment process”.

    The report, politely, blames mini-me syndrome: “There is a natural tendency for the male-dominated corporate elite to exclude demographically dissimilar others.” It adds “The Board appointment process is subjective and exclusionary”. Suitable women were not made aware of available directorships, or the selection criteria and were the victims of “unconscious bias”. It adds that “old boys networks, competitive behaviours, a long hours culture and informal events often related to masculine activities” also excluded women. “These cultures make it difficult for women to build the relationships and the trust needed to effectively operate on Boards.”

    HeadHunters are key to changing such perceptions, but all too often mimic the traits of the boards they serve, according to Cranfield. “There is evidence that a number of practices employed by organisations and ESFs in the appointment process fail to foster diversity,” These practices include focussing on nebulous qualities for board membership such as “fit” or “chemistry” (ie being like the other chaps) and they found that very few qualified women”reported having been approached by search consultants for potential NED appointments”. Cranfield found that recruitment to board still very much depended on being part of the old boys network or “being known to someone on the board”. Women who had been appointed said that “high visibility” or “family contacts” had been essential. Also counting against women is the head hunters’ insistence on “prior board experience” – leaving them in a Catch 22 situation.



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