CITY FOCUS: Women to turn table on boards

Top companies mus t no longer skirt the issue of the glass ceiling for women, Lord Davies of Abersoch warned corporate Britain yesterday.

24th February 2011- His government-backed report on Women on Boards told the chairmen of elite FTSE 100 businesses that they should aim for at least a quarter of the faces round their boardroom table to be female by 2015 – or else.

The former chairman of Standard Chartered is threatening companies that if they do not comply of their own accord, the government will look at imposing quotas for women, as has been done in Norway.

‘We need radical change in the boardrooms of Britain,’ he said. ‘If we don’t get success we reserve the right to look at quotas,’ he added.

Achieving his target will involve a third of all new board appointments, or 135 directorships, going to women over the next five years. Davies, a trade minister under the previous government, is a diminutive, balding figure who seems an unl ikely feminist standard-bearer.

But he has become an evangelist for the cause. ‘Women just have better emotional intelligence than men and we need more of that in the boardroom,’ he says. 

The lack of women in boardrooms did not attract much attention during the economic boom. It re- surfaced in the credit crunch, when a surfeit of testosterone at the top of banks was blamed for some of the excess. The Treasury Select Committee called for more women in senior positions in the City to combat the male herd mentality that it said contributed to the crisis. Davies is advocating a concerted push for equality by companies, big investors and headhunters.

He wants a complete overhaul of the way in which candidates are appointed to boards to remove bias against women. Companies will have to reveal the proportion of women employed at all levels. The corporate governance code is to be changed so that companies are required to have a policy on boardroom diversity, and chairmen must disclose informat ion on thei r appointment process. Davies is urging headhunters to draw up a code of conduct and to consider women from outside the corporate mainstream.

Reversing decades of male domination will be no easy matter. Women occupy only 12.5pc of board seats on FTSE 100 firms and only 5.5pc of executive posts, according to the most recent research by Cranfield School of Management. It is possible – literally – to count female chief executives in the Footsie on the digits of one hand. The reasons are complex. As well as childcare issues, the Institute of Leadership and Management found in a recent study that women suffer from lower levels of self-confidence and ambition than men.

Another issue mentioned privately by several senior figures is the problem of women sabotaging their own sex.

‘Some are brilliant role models and mentors but others are deliberately undermining,’ said one. Amanda Mackenzie, a senior executive at Aviva and a member of Lord Davies’ panel, said: ‘It does happen and it is the most horrible, hurtful thing. But let’s get it in perspective. Even if there were no Queen Bees, the problems would still exist.’

Another vexed topic is whether companies really would perform better with more women at the top. The standard line is that mixed boards are less prone to groupthink and more in touch with female customers and staff, but there a lack of hard fact.

Several studies, including one by consultant McKinsey and another by US research group Catalyst found a link between the presence of women and above-average performance. Cranfield’s Professor Susan Vinnicombe admits there is no evidence the presence of women actually caused the outperformance, which may have been due to other factors, but insists diversity is ‘just good business sense’.

Lord Davies’ report was generally greeted with relief that he had backed away from quotas. But some argue that approach is a cop-out. Amanda Jobbins, CISCO’s vice president of European technology and corporate marketing, said: ‘At this rate it will take 73 years before equal numbers of women and men are in the FTSE 100 boardrooms.

‘I wholly agree all roles should be appointed on merit, but who is determining the definition of merit today? The male incumbents. We need quotas to accelerate the change.’

In the current climate, few UK bosses would dare to express openly the view of top German banker Josef Ackermann, who recently declared women make boardrooms ‘prettier and more colourful’. But there is still a long way to go before British business gets in touch with its feminine side.

 Author: Ruth Sunderland is Associate City Editor of the Daily Mail