Westminster Business Forum - The future for corporate governance

Read the text of a speech Rowena Ironside, Chair of WOB UK, gave at Westminster Business Forum on  "The future for corporate governance - shareholder influence, boardroom composition and options for reform.".

Westminster Business Forum Tuesday 7 November 2017

What more can be done to promote diversity at the top?

Since we launched Women on Boards in the UK in 2012, there has been a lot of progress around boardroom diversity in certain sectors. In 2011 the percentage of women on the boards of our top listed companies, the FTSE 100, was 12.5%. This percentage had doubled to 26% five years later. And whereas in 2011 there were 152 companies in the FTSE 350 with all male boards; now there are only 7.
These changes show what can be done when a problem is called out and a concerted effort is made by a variety of people to address it. In the case of boardroom diversity it was Cranfield University who did the research to produce the statistics and the Lord Davies Commission supported by the 30% Club who made sure the issue got attention from the government and the listed company sector and the press. Phone calls were made to the Chairman of each FTSE company and feet were held to the fire both privately and publicly.

So, to get change;
  1. highlight the problem
  2. set achievable targets for change (ideally set for themselves)
  3. help people believe that they can meet those targets
  4. sanction those who make no effort (the last resort)

This is not rocket science. But historically one of the problems has been the lack of recognition that the status quo was not serving everyone well. The elite men assumed that the reason there were no women or other minorities sitting alongside them on the executive committee or in the boardroom was that women were not interested, or lacked the time or ambition.  And they honestly believed they had got their jobs on merit. If there is one thing I want you to take away from my talk today it is the understanding that merit is not an objective standard. It is highly subjective, often strongly self-referential and defined by the dominant culture. Merit is not how people have historically got to the top; but privilege is typically invisible to the privileged.

As well as calling out the problem, if we want to change the status quo we also need targets that reflect the talent mix we are seeking. Targets are a signalling mechanism within an organisation of what is important and they also play to the basic human need for a sense of achievement.  As was shown with the FTSE improvements, if you set an achievable target people will find creative ways to meet it. At Women On Boards we call this getting them to “turn off the spotlight and turn on the floodlights” in the search for new talent.

Women On Boards has been operating in the UK for 5 years. Our focus is on providing the information, encouragement and connections to help women of all ages to successfully apply for board and senior leadership roles. When we launched Women On Boards I hoped that we would have made ourselves redundant by now. Realistically this is probably going to be another 5 years. But I do still believe that once the diversity of a board - or any other leadership group - passes a tipping point (which the research suggest is at least three women or 30% of the board), the progress becomes more self-sustaining.  Everyone on the board starts to recognise that the quality of debate has improved as a result of the diversity and the board also starts asking questions about issues that might previously have been overlooked.

For Women On Boards it is not just about the boardroom . We have 5500 members who work for our corporate subscribers. These women are mid-career and are the pipeline of future leaders. Our workshops encourage them to take on board and committee roles now to develop their skills and networks and build the confidence to put their hand up for promotions and eventual top leadership.

So to ensure continued progress, we need to consistently execute those interventions with proven results (like setting targets) and not take our eye off the ball. When someone like Donald Trump with his flagrant disrespect for women can become President of the United States, you realise just how fragile progress can be. A single leader can normalise bad behaviour as easily as good. So each one of us needs to take responsibility for challenging the status quo and role modelling the change we want to see in the world.

Women On Boards has helped over 1000 women take on a new board or committee role in the UK in the last five years, some of them small charity boards and some of them of large listed companies. This “one woman at a time” approach requires hard work and commitment, but we believe that the end result will be a shift in the balance of power at the top of our society that reflects greater diversity of perspectives and values, and strengthens capitalism and our economy.    

Rowena Ironside, Chair, WOB UK Ltd

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