Women on Boards

The Opportunity Now response to the call for evidence.


Lord Davies is developing a business strategy on behalf of government to increase the number of women on boards of listed companies in the UK.  He is reporting to Edward Davey, the Business Minister, and Lynne Featherstone, Equalities Minister. 
Opportunity Now has been asked to contribute to the review and we view this as an ideal opportunity for our member organisations to profile the work it that is being undertaken on gender diversity in the workplace and to influence the outcomes of this high profile report.

We surveyed our members,  firstly asking them to help us understand how having more women on boards has helped to improve board room culture/decision making processes. Following on from this we asked for case study examples of how women in senior management levels have improved organisational performance.

Opportunity Now welcomes the chance to respond to this consultation.  Our access to the expertise and experience of our member organisations forms the basis of our response.  This response consists of a summary of the discussions held between the Rt Hon Theresa May MP and members of the Opportunity Now Board, and a record of responses from our member companies in answer  to questions we asked them about women on boards and women in senior management. 

Opportunity Now believes that the UK cannot risk  wasting the talents of another generation of women and leaving the boardrooms of UK organisations without the diversity of skills, talents and experiences that will enrich decision making, enhance innovation and make us more competitive in the future. 

Improved Measurement/ Transparency

• It would be worth revisiting the Operating and Financial Review which included recommendations on people reporting and accounting for people
• Introduce a “comply or explain” element on reporting, where organisations are required to report in their annual reviews what they are doing to increase diversity within their organisation or the diversity split across their management grades (similar to the model recently adopted in Australia)
• Sector regulators can play a key part in driving change – they need to be better engaged on the importance of the issues, i.e. link capital rating with the risk of homogeneous boards

Leadership

•   CEOs must be visibly behind this, it is essential they are actively engaged, and financially support the process
•   CEOs should be aware and intolerant of ‘clubby’ behaviours that disadvantage women and put  women off
  

Recruitment

• Companies should seek to increase objectivity in the recruitment process, including  advertisement of roles and balanced nominating committees. 
• There is a need for greater clarity and specificity around the appropriate mix of skills needed for a balanced board
• Both head-hunters and recruiting organisations need to challenge briefs, the experience deemed  necessary and fish in a wider pool as they are being tasked with producing diverse shortlists
• It is important to sell the positive stories of how fulfilling, enjoyable, challenging, life changing it can be to be on a board
• There are plenty of well trained women already. It’s not a lack of skills but just getting them noticed.  There is a need to force organisations to look for them and groom them for success and be less prescriptive in criteria for boards
• Head-hunters need to access public sector women for private sector boards and vice versa
• Head-hunters must build up their pools of board ready women, recruiters must demand balanced shortlists

Target Setting

• The experience of some organisations shows that setting long term and considered targets drastically improved progress. They focus debate and keep things on the board agenda.
• There was a discussion about aspirational targets compared to quotas. Opportunity Now requests that the Lord Davies review includes specific recommendations of what good practice looks like in this area and how to set targets.
• Reaction to board representation quotas would be cautious but not necessarily negative.  Having an appropriate period to build up to this would be important so good organisations could set targets over and above the quotas and stay ahead of the competition.
•  We could support a campaign to get targets and balanced long list/short lists included in provisions of the UK Governance Code, on a basis that companies have to comply or explain why not. 
• Targets should apply to both ED and NED to stop organisations packing the board with NEDs and also to ensure balanced decision making in all areas. 
• Accountability is a key lever to get change – have diversity targets in annual reports. 

Pipeline Management

• It is often too easy to fall back on the “urban myth” that women lack the skills needed for corporate boards i.e. lack of financial experience.  For example, for many years women accountants have qualified in equal measures to men but there is a perception that women often lack this skill. The real issue is that experienced women are not getting through the ranks – there is a leaking pipeline.
• We recommend model measures for middle managers – this could  help to address the pipeline issue with clear recommendations for line managers
• Talent management should be discussed at every board meeting, not just once a year. This will put it at the heart of the debate about business performance. 
• Also need to look at glass walls within organisations.  You don’t want it to always be the HR director that is the woman on the board!
• Promote sponsorship schemes to encourage women to take up non –exec positions

Public Sector Boards

• Public sector board recruitment is more transparent, with greater female representation (i.e. 38% women on boards).
• For one board member, their mentor has informed them that public sector experience is not a natural stepping stone to corporate boards. Although another who found an NHS board position, through the Appointments Commission, was able to network with individuals on corporate boards thereby increasing their ability to be seen. 
• Public sector board experience can be a training ground for corporate boards; many public sector boards are challenging managing complex situations where there is a high level of risk. why are they not more readily used?

Public Sector Experience

• Achievements to date in the public sector have been greater than in private sector, what can be used from their experience?
• There are many women already on Public Sector Boards, they are already a source of talented board ready women, why are they not pursued by the private sector, how could this be done?

Supply chains

• The public sector has a key role to play in driving change through its procurement process and being vocal in its need for its suppliers to champion diversity. An example was cited where a company lost a major contract with a public sector organisation due to their lack of diversity – this had serious repercussions throughout the company and very clearly reinforced the business importance of diversity.

Building on good practice

• Corporations must be willing to change the scenario on how they engage with excluded groups
• Peer pressure should be utilised – showcase and reward organisations that are doing it well
• Use influential and pioneering Chairs who have been successful in creating diverse boards to encourage their contemporaries
• Messaging – to send a clear message to a larger audience, the tone should be simple and couched in the business imperative. 

Unconscious Bias

• Unconscious bias training with senior people is vital.  Telling people to change doesn’t work until you have shown them that everyone has bias and needs support to change behaviour.  This needs to be company wide programme

Government Levers

•  Mandatory balanced long lists
•  Champion and positively encourage women already on boards to act as role models
•  Consider tax incentives for balanced boards - money talks
•  Increasing availability and transparency of statistics, global and EU comparisons
•  Make use of strong female role models to create aspiration for boards as a way of helping organisations fulfil the existing requirements of the code for open and transparent recruiting. 
•  Legislation is a key lever to change or setting out ‘what good looks like’

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