Time to force women into boardrooms?

 
Business woman with bag against modern light wall blue

In pretty much every position I have ever held, for 30 years, my immediate line manager or the boss most important to the way I did my job has been a woman.

That was true when I started as a cub reporter at the Investors Chronicle almost 30 years ago. It was true at the Independent 25 years ago. It was true when I was at the Financial Times, for part of my stint there in the 1990s. It was true at the Sunday Telegraph, before I joined the BBC at the beginning of 2006. And it has been true for all my six years at the BBC.

But what has always struck me as slightly odd is that, with one exception, the boss above my female boss and the uber boss in the organisation as a whole was always a man (the exception was Marjorie Scardino, chief executive of Pearson, owner of the FT - although the editors of the FT have consistently been men).

Given that my female bosses have usually been both ambitious and first rate - and when not absolutely brilliant, certainly not inferior to the rather dull men around them - I struggle to find an explanation for the "men-only-rise" phenomenon that isn't (at least in part) discrimination and prejudice.

So if your personal experience is anything like mine, you may not find it surprising or shocking that the European Commission's female Justice, Fundamental Rights and Citizenship commissioner has lost patience with Europe's private sector and wants to see a mandatory increase in female representation on boards: she wants 30% of big companies directors to be women by 2015 and 40% by 2020.

For most European countries, including the UK, her targets would require anything from a doubling to a trebling in the number of women on boards.

Now for years it seemed obvious to me that the operation of the market would correct this failure to select and promote the best people. The allocation of human capital would become gender blind, simply because companies that favour Y chromosomes in the executive suite and boardroom would over time recognise that they were doing themselves harm - they would notice that their most effective competitors were those fishing in a talent pool of the whole world, not just half of it.

I have to say that if my analysis was correct, the correction of this market anomaly has not exactly been rapid. Recent research by the leading headhunters, Spencer Stuart, shows that only 5.7% of the executive, board-level directors of FTSE 150 companies (that's the UK's 150 biggest businesses) are women and that 21% do not have a woman on the board.

There has been a mini-surge in the recruitment of female non-executives in the wake of last year's government-backed report from Lord [Mervyn] Davies, calling for at least 25% of each FTSE 100 listed company's board to be female.

Spencer Stuart says that 17.5% of non-execs in the FTSE 150 are women, and the FT this morning reports that a Cranfield study to be released next week shows a rise over the past year from 12.5% to just under 15% in the percentage of women on FTSE 100 boards.

Now the approach in Britain to increasing the representation of women on boards is a voluntary one. By contrast in France a bill was passed last year requiring 20% of directors of listed French companies to be women by 2014 and 40% by 2017.

There have been two striking consequences, according to Spencer Stuart. First French boards are broadening the skills criteria when recruiting new directors, so as to give them a bigger choice of women when making their selection (they are looking at candidates with legal, communications and HR expertise, and not just operations or finance executives - and they are also recruiting entrepreneurs, civil servants and consultants).

Second the majority of new director appointments have been women.

So in one sense at least, compulsion seems to work. The question, of course, is whether compulsion will produce inferior companies - will businesses take "any old woman" on to the board just to hit the mandatory quota?

Is that really a risk? Is it impossible to be confident of getting capable women to fill board room positions to a deadline?

If it were impossible to find such top-quality director material from a search of half the world, then we may have a bigger problem than just the shortage of women in the boardroom: the implication would be that the jobs market doesn't work effectively for women at any level, and surely the evidence is not quite so grim.

 
Robert Peston Article written by Robert Peston Robert Peston Economics editor

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  • rate this
    +4

    Comment number 15.

    Forcing a quota is plain perverse. Recruitment of Board members/top management has got to be on merit and do other Board members feel comfortable with the appointment (which may take background into account. Why should women get preferential treatment which is what quotas are about? Why should a government interfere in the recuritment processes of private firms?

  • rate this
    +1

    Comment number 14.

    We need the best people in boards if that is a woman OK however of more importance is effective Shareholder representation on Boards. Females on board is irrelevant as long as board members of either sex continue to reward failure and treat shareholders with contempt.

    Boards are servants of shareholder - that is what needs reinforcing - nothing more.

  • rate this
    +8

    Comment number 13.

    #3 is right: in my firm directors are long-experienced economists. Not sure how many female PhD economists we had 40 years ago, but the one we do have probably over-represents her generation, for now.

    Life often holds women back mid-career. Efforts to improve work-life balance for women AND men will help and won't be blatantly discriminatory like this 40% plan. Treat the cause not the symptoms!

  • rate this
    +20

    Comment number 12.

    Ironically, one of the factors holding back women is maternity rights (or rather, lack of equal paternity rights).

    What does it do for a woman's career if she's entitled to a year off but her partner isn't?

    Not only is she forced to "lose" a year when she has a child, but her employers will be wary of promoting someone who potentially might take time off (unofficially, of course).

  • rate this
    +1

    Comment number 11.

    "In pretty much every position I have ever held, for 30 years, my immediate line manager or the boss most important to the way I did my job has been a woman."


    Are you bragging or complaining?

  • rate this
    -6

    Comment number 10.

    Re #7 stanilic: agree totally with your views. What is also needed is for an organisation to put in place those aspects of corporate life that interest women in senior positions. Having worked for both male and female bosses, I am inclined to the view that a female boss (when she is good) is far superior to her male counterpart.

  • rate this
    +2

    Comment number 9.

    Change the selection and rewards systems in business-at the moment they're male focused http://tinyurl.com/6n4bgw6. Even if you appoint women,they won't stay in place.Cameron has compared UK economy to Scandinavia,they are way ahead in their women on board quota,but they have a far superior benefit system,which actually benefits women,therefore is it more appealing to them to be part of the board?

  • rate this
    +12

    Comment number 8.

    But Eton is a boys school!

    Where are these women going to come from?

  • rate this
    +21

    Comment number 7.

    There is no correlation between skill, aptitude, application and competence in the holding of the top jobs. The top jobs go to those who are seen as `one of us'. In other words individuals deemed `safe'.

    This accounts for the general ossification of the economy and society in general. Quotas won't help either.

  • rate this
    +21

    Comment number 6.

    It isn't just women who can't get into the boardrooms of UKPLC- it's most men, too- all those who lack the correct connections to the "old boys". Anyone who believes that the current crop of FTSE 100 directors are there entirely on merit is seriously deluded.

  • Comment number 5.

    This comment was removed because the moderators found it broke the house rules. Explain.

  • rate this
    +2

    Comment number 4.

    Why can't we just appoint the best candidate for the job?

    As this is an EU initiative, I do NOT want it. It will be a mess. Poorly thought out and poorly implemented - as usual.

    It will just have the net effect of pushing companies and employment out of Europe - just like the rest of their undemocratic legislation has done.

  • rate this
    +16

    Comment number 3.

    Two problems:
    - Boardroom membership in the UK comes from being part of the old boys network. Boardroom members rarelly become so by merit, it's all about connections.
    - No decent part-time jobs, expensive childcare, an unproductive culture of overwork, no concept of a "houseman"

    In general quotas are bad: manipulative parasites that play the game get promoted "to fill the quota", not the worthy

  • rate this
    +2

    Comment number 2.

    What's the average age of s FTSE100 director? What are the average ages of their shareholders? Surely we are mainly talking about people in their 50s/60s and therefore this problem should start to self-correct in the next couple of decades?

  • rate this
    +1

    Comment number 1.

    I had a double take there, I thought Robert wrote 'bedrooms' !

 

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