19 February 2011 – At a grand City dinner last year hosted by one of the UK’s biggest companies, Lord Mervyn Davies of Abersoch gave an impassioned speech about the importance of having more female directors on top corporate boards.
He could see for himself what he was up against. Not counting the waitresses, I spotted only four women, including myself, among the black and white sea of dinner jackets.
At least Davies, who will in the next couple of weeks deliver his government-sponsored report into how women can smash the glass ceiling, could not be accused of preaching to the converted.
He is likely to shy away from insisting companies appoint a quota of women to their boards.
This is an experiment which has been tried in Norway, where the government imposed a quota of 40% in 2004 and which appears to have worked surprisingly well.
Though initially greeted with scepticism and concern that an influx of women would lower the quality of boards, the policy has now gained acceptance and is being emulated in Spain and France.
Davies is plumping instead for targets and is expected to say that companies should aim for around a third of board members to be women within four or five years.
The relatively long time frame is an acknowledgement that board positions do not revolve very often, and so to shoe-horn in large numbers of female directors to a tight deadline would be disruptive.
One reason he shied away from quotas is that many senior women object strongly to the idea. There were more than 2,600 responses to his consultation process and a significant majority opposed quotas, as they feared it would lead to all women being seen as tokens.
Despite a growing consensus among the largely male upper echelons of corporate Britain that more women on boards would be A Good Thing, it just isn’t happening.
Research by McKinsey and others suggests the majority of business leaders believe companies with mixed boards perform better. The view is that once women enter the room, they bring a different perspective and reduce the tendency towards manly group-think.
The targets suggested by Davies reflect the idea one woman is not enough, since she may be drowned out by her male colleagues, or adopt the dominant attitude to fit in. Two or three women is seen as an ideal number. Views like these have become part of the new corporate orthodoxy, but the rhetoric has not translated into reality.
The Cranfield Female FTSE report for 2010 found that the percentage of directorships in the UK’s top 100 companies is static at 12.5%, and that women account for only 1 in 20 executive director posts.
Twenty one companies in the blue chip index still have all-male boards. The reasons for this are complex and not all the barriers to women are to be found in the workplace.
Possible bias among head-hunters is one issue. One former FTSE 100 chairman told me this week that when seeking new directors, he would have to ask head-hunters repeatedly to include female candidates in long and short-lists. On one occasion, he had to find a woman director himself through his own contacts.
The head-hunters in turn blame a lack of suitably qualified and ambitious contenders, and claim women are often victims of their own lack of self-confidence. As one of them argues, if there are ten criteria required for a job, and a man can satisfy seven or eight, then he will apply. A woman won’t put herself forward unless she can fulfil at least 12 out of ten.
The media also comes in for blame for allegedly subjecting female bosses to greater scrutiny than men, though much of the coverage of women at the top is positive. Female executives say the demands of juggling a career and family life are a hurdle causing many to drop out at mid-management level. In order to put in the hours and the travel required to be promoted, mothers would need to pay for round-the-clock childcare. But their salary at that stage, before they have reached the top ranks, may not cover the costs of full scale nanny care.
One senior FTSE 100 executive says she worked at a loss for several years to cover the costs of childcare, betting that her long-term prospects would make the sacrifice worthwhile. Others point to problems with husbands feeling threatened by their wives’ success, which may lead some women to tone down their pursuit of boardroom glory.
And no-one can really explain why, of the female chief executives we do have so many are American, with British women still a relative rarity. On the plus side, it is no longer the novelty it once was to see a FTSE 100 company run by a woman.
Female bosses have been installed at formerly male strongholds such as mining group Anglo-American, run by Cynthia Carroll and Imperial Tobacco, where Alison Cooper is in charge. The success of Dame Marjorie Scardino at Pearson and Angela Ahrendts at Burberry have won respect.
But equality in the boardroom remains a distant prospect, and it remains to be seen whether Lord Davies’ exhortations will bring it any closer.
Author: Ruth Sunderland is Associate City Editor of the Dail Mail