Helen Croft and Agnes Bamford from The Results Centre discuss the under representation of women at the highest levels of business.
It seems something of a paradox that, whilst most business leaders and politicians acknowledge the importance of equal gender representation on British company boards, many also fiercely oppose the quickest and most effective means of achieving that equality – the implementation of quotas.
Of course, quotas have their benefits and disadvantages. Critics argue that using a quota system violates the principle of merit, whilst supporters believe that the quota system is crucial in remedying the gender imbalance. Cherie Booth QC, wife of the former Prime Minister Tony Blair, recently waded into the argument. Making a speech at the Hay Festival, Cherie put forward the argument that without using quotas, equality would take much longer to achieve.
” She also said that the introduction of controversial all-women shortlists by the Labour party was one of the party actions she was most proud of. ”
She told listeners: “…if we wait for it to happen naturally, I think it’s going to take a long time.” Speaking about the all-women shortlist, Cherie added, “There were more than 100 women MPs who did the job absolutely as well as the men. If a few women didn’t do the job quite as well, believe me there are a lot of men who didn’t either. I think the problem is that exceptional women will always succeed. But there are plenty of less-exceptional men who succeed. Until we get the less-exceptional women succeeding equally, we do not have full equality. We have to do something to accelerate that.”
Whether you agree with Cherie Booth’s stance or not, the fact remains that women account for only 20% of board membership in FTSE 100 companies. Admittedly, this is an improvement on previous figures, but it is still a long way short of the 25% target set for 2015 – and nowhere near the ideal of 50%, which should surely be the ultimate aim?
Leading the way
One country that has taken concrete steps to address the gender issue is Norway. Despite some strong opposition, the Norwegian government passed a law in 2008 imposing a 40% quota law for women on public boards. The policy is now widely accepted and having seen quotas in action, some other European countries have also introduced similar measures.
The situation in the UK is somewhat different. Recent research demonstrates a distinct polarisation in our economy. Whilst liberal market policies have resulted in more women reaching high-status positions than in Scandinavia, Britain is also the European country where most women are found in low-status positions. So do we rely on action to change the status quo, or place our trust in a slower, more organic evolution?
Whilst quota sceptics acknowledge that gender diversity is good for business, they argue that quotas destroy competition and selection on merit. Barrister Hilary Heilbron, who is the daughter of Rose Heilbron, England’s first female judge, was speaking at Hay alongside Cherie Booth. She summarised the argument against quotas saying “….if you have quotas I think people resent the fact that women get on, perhaps because it’s not on merit. I also think women may resent it, because they haven’t done it under their own steam.”
Looking at the evidence
So how are quotas working in practice? The results from data analyses comparing Norway and Denmark indicate some positive effects arising from the Norwegian reform, although the conclusion so far is that the effects on profits are neutral.
” However, a study by the University of Michigan found that the increased presence of women on boards in Norway had resulted in slight losses in companies’ bottom lines to date. ”
One possible explanation for this could be a classic vicious circle – that the women recently promoted to boards have less upper management experience. But, if the situation doesn’t change, how are they ever to get the experience they need?
Whatever the explanation, it’s important to appreciate that the benefits of significant change often take time to filter through and have a positive impact.
Other evidence suggests that increasing the number of women in senior positions improves the value of a company’s human capital. In Norway, the presence of more women in the boardroom has corresponded with a higher overall level of education – a conclusion supported by a study focusing on British corporate boards. Furthermore, research documented in the IMF report Women, Work & the Economy: Economic Gains from Gender Equity, cited that the impact of gender equality at any level encourages participation at the levels below, thereby creating a more balanced pipeline for the future. As these changes work through the system, the need for quotas should diminish, meaning that we could return to genuinely competitive selection from a more balanced set of candidates.
Many women (whether they work in business or not) will be unsurprised to learn that evidence from Norway suggests that having more gender balanced boards has resulted in more focused and strategic decision-making, improved communication and less conflict, as well as changing overall management style for the better.
The childcare question
In these more enlightened times, one issue that most women continue to struggle with is balancing home and family life.
” Leaving the quota argument aside, the area of childcare remains a huge barrier to the top for many women with families. ”
If we want to see more women reach senior management, this is a key issue to address.
One less controversial strategy is the potential introduction of a more balanced structure around parental leave for childbirth. The UK typically offers women up to one year and men two weeks at present. However, in Norway, after the initial 13 weeks post birth taken by the mother, the maternity/ paternity leave period can be taken by whichever parent the household chooses and is not dictated by corporate policy. Furthermore, in Norway, the government pays up to £30, 000 per year to a mother or father on parental leave with companies covering the rest so no-one loses out economically.
There is a range of childcare available to working mothers, but most nurseries operate an office hours policy, whilst after school and pre-school care remains patchy. Offering affordable childcare, ideally on site, more flexible working hours and running campaigns to challenge the societal concept that women bear greater responsibility for childcare would all help redress gender imbalance and make the workplace a more accommodating environment for women.
Some businesses have also taken the forward thinking step of offering mentoring, coaching or development programmes for women, particularly if they have experienced a major upheaval such as returning to work after having a child. Ideally, this should become standard practice, offering practical support as well as sending a clear message of encouragement and validation.
However, women themselves must take some share of responsibility for their scarce presence in the boardroom. Our own mindsets often influence our aspirations and limit our pursuit of equal employment opportunities and higher level roles. Quotas can play an important role here, creating positive role models and empowering those who are most likely to be committed to making the changes needed to make the achievement of a better work/ home life balance possible for those with family commitments.
Of course, everyone wants to feel that they have got to the top on their own merit – and the ultimate goal is to make the use of quotas unnecessary. However, in reality, women may need a little help along the way if a more equitable system is to be achieved within the next decade or so. The good news is that, once there is more equality on boards and women are not deselecting themselves early in their careers, there should be a natural return to the process of truly competitive selection.
” Until that time, the introduction of boardroom quotas, whilst not ideal, may be the best solution that we have. ”
Published with permission.