Getting women on board
The myriad excuses given by CEOs and chairs from FTSE 350 companies for why women were not represented on their company boards hit the headlines recently. Among the gems were that women ‘did not want the hassle’ of sitting on a board, they felt women would not ‘fit in’ with their organisation or that all the ‘good’ women had already been hired elsewhere.
These comments were published to mark the halfway point of the Hampton-Alexander Review, which has set a target for one third of FTSE leadership positions to be occupied by women by 2020. There are definite signs of progress too – while in 2011 there were 152 all-male boards within FTSE 350 companies there were just 10 in 2017.
However much still needs to be done, and one psychologist who has been a driving force behind changing the culture to help women into senior positions is Professor Ruth Sealy (University of Exeter). Sealy has worked on the Female FTSE report since 2007 and was lead researcher on the annual project for almost 10 years. She was also involved with the Davies Review, which set a target in 2011 to have 25 per cent female board membership by 2015 and gave recommendations for how this could be achieved.
Since the start of the Davies Review Sealy said she had seen phenomenal shifts both in the numbers of women on boards and in the conversations people are having on the topic.
‘I had many calls from journalists in 2010 asking why this was important, what the point was, but no one would ask those questions now. The use of targets is a massive cultural change in organisations too, when the Davies Report proposed a target of 25 per cent of board members being female there was uproar and outrage about government or government bodies interfering with business and those saying diversity targets were ridiculous and would cause mayhem and destruction which they didn’t.
‘Now when you look at listed companies and big professional service firms pretty much all of them have stated diversity targets whether at board level or even further down the organisation. Most have targets for gender and more are coming on board with ethnicity and other diversity characteristics, which is fantastic and it’s a massive change.’
Sealy said the excuses highlighted by the Hampton-Alexander Review were commonplace a few years ago and were one of the things that motivated her work. ‘I used to get so cross with CEOs and chairs who’d make silly comments like “I’d love to have a woman on my board but I just can’t find one”. Women are 49 per cent of the working population and have been a majority of graduates since 1992. Clearly some people still think these things, but I think it’s a minority now in the larger organisations and it’s just sheer ignorance. The evidence is so overwhelming for having diversity, and why would you only fish from half of the talent pool?’
Sealy more recently has moved her attention to the dynamics of boards themselves and how these can affect diversity. Every PLC board is expected to be evaluated externally once every three years, and as a result board evaluating companies have cropped up who carry out these evaluations.
Sealy and her colleagues have carried out interviews with these board evaluators and found two quite distinct approaches – there are those who focus on processes and measuring the board with surveys and those who take a more behavioural approach. ‘One of the things we found was those that take that more behavioural approach are really clear about the difference a diverse board makes in terms of the more effective dynamic of the group that leads to better decision-making processes, and were really clear on the role of the board evaluator in terms of being able to support the chair to make that move from a non-diverse board through to a diverse one.’
An advocate of transparency among large businesses, Sealy has also been involved with the Financial Reporting Council (FRC). The council oversees diversity reporting by PLCs and periodically updates its code of governance. ‘The FRC had seen our board evaluation study and we’d made a couple of recommendations around board evaluation that more detail should be included in the code reporting. We suggested companies should say who did their board evaluation, what type it was, and the actions they took as a result of that.
‘We are looking at how well the FTSE 350 companies are complying with what they’re supposed to do and how much information they give about diversity. You can often tell how serious a company is about their diversity in how they write about it in a report – if they’re committed they give lots of examples of what they’re doing to improve diversity.’
Sealy said over the next few months and years she hopes to dig deeper into board dynamics and composition and its effect on governance. ‘I have one PhD student who’s looking at the rates of participation between men and women in different roles on boards. I’m really interested in the board evaluation side of things – the study we did was an initial first study so it would be great to do more board work there… We need to continue to push the numbers at board and senior management level and that has to be a drum that’s continually beaten.’
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