Quotas are no silver bullet for women on the board

Feb 24 2011 by Nic Paton Print This Article

However much male-dominated boards may aspire (yes, even genuinely) to be like their contemporaries in Norway when it comes to female representation, what is becoming increasingly clear is that there is no quick fix to getting from a principled, well-meaning aspiration to an actualité where boards contain appropriate, representative proportions of women who have been appointed on merit.

In fact, just as the reasons why women still are not adequately represented at boardroom level in the US and UK are complex and often as much down to individual choices as they are to cultural or organisational issues (though those can of course may often be linked), so there is no "silver bullet" to improving gender representation on boards, and certainly no "silver quota".

In fact, a major review commissioned by the UK government has this week backed away from imposing mandatory quotas to force companies to hire female executives.

Unlike in Norway, where 40% of board directors are women, in Britain the figure is just 12%, despite women generally being well-represented at middle and middle-senior management level.

The independent review by Lord Davies of Abersoch has recommended that FTSE-100 companies should aim for a minimum of 25% female board representation by 2015, while FTSE-350 firms should be aspiring to much higher levels of representation.

He also recommended that chief executives of quoted companies be required to make public the proportion of women they aim to have on their executive committees in 2013 and 2015.

The step back from enforced gender quotas has by and large been welcomed by British business organisations, with Miles Templeman, director-general of the Institute of Directors stressing quotas would have been incompatible with a genuinely meritocratic approach.

"A greater diversity of people on boards in general is necessary, and this clearly means we need more female directors. The way to do this is to increase the pool of female senior executives from which directors can be recruited. Improving flexible working opportunities for aspiring female executives will be central, with companies rather than government taking the lead in creating these opportunities," he argued.

Quotas he added, (which the report did not rule out further down the line), can in fact simply make the situation worse, by being "demeaning and undermining for female directors and aspiring female directors".

But the IoD agreed with the report in that it would be positive for firms to do more to ensure more women from outside the corporate "mainstream", such as entrepreneurs, academics, civil servants and senior women with professional service backgrounds, played a greater role on boards.

"Appropriate development and mentoring activities – tailored to the specific needs of women – could contribute a great deal to the achievement of this objective," said Templeman.

Dawn Nicholson, HR consulting partner at PricewaterhouseCoopers, agreed that while we all agree the aspiration is good, what firms need to be looking at is what mechanisms will actually work.

"The risk is that these targets, which are highly aspirational, will simply encourage employers to hire in senior women without dealing with the far more complex issue of why women are failing to progress within their organisations in the first place. This is like painting over a damp wall," she pointed out.

"Until organisations get to grips with the points in the employee life cycle the inequalities begin to arise, and start addressing the underlying causes, it is difficult to see what will change," she added.

Helena Morrissey, founder of business lobby body The 30% Club and chief executive of Newton Investment Management agreed: "A quota at the board level might be a 'quick fix' but would create only the illusion of change. A quota actually undermines the principle of equality, is condescending and makes no economic sense.

"We are much more likely to achieve gender equality in the boardroom if we allow businesses to diversify their boards voluntarily and organically," she added.

Just as importantly as the 2013 and 2015 targets was the requirement that quoted companies disclose every year exactly how many women they have in senior positions and to indicate what steps they are taking to achieve better gender balance at senior levels, she suggested.

"We know that these recommendations aren't going to change the make-up of boardrooms overnight, but they represent a huge step towards equality for all women," she stressed.

And Penny de Valk, chief executive of the Institute of Leadership & Management (ILM), argued to getting more women into senior roles was flexibility.

"We know that the talent is out there so UK business must be more flexible to achieve the required flow of female leaders into senior roles. However, this must not result in helicoptering women into top roles. Instead UK plc has to build an effective talent pipeline for female leaders," she said.

Earlier this month, the ILM published a poll of 3,000 managers suggesting a third of the female managers questioned felt their gender had indeed hindered their career progression.

Three-quarters felt the glass ceiling still existed, half of those polled supported the introduction of quotas (against a quarter of men polled) and many believed lower confidence and ambition often impeded the careers of women leaders.