Margareta Pagano: Why the 'only women in the boardroom' just don't get it
Research shows that, quite apart from 'fairness', having more females on boards boosts productivity. That's why we need fixed quotas – and quickly
Sunday 16 October 2011
The more I listen to people like Baroness Sheila Noakes talking about gender in the boardroom, the more persuaded I am that immediate compulsory quotas are the only way forward for women in business.
The Baroness, a non-executive director of Royal Bank of Scotland, took part in the most extraordinary interview on the Today radio programme last week, on the Davies report, in which she said the fixation on quotas was silly, and that even a board of 20 men could be considered a balanced one, provided that the men think differently.
Then she showed her prejudice even more by asking why people say having more women on boards would bring a different perspective. Hello? Well, even the great John Humphrys choked at this, calling on Sarah Montague to help persuade Noakes that surely having a gender mix, as well as different personalities, would be healthy?
Noakes wasn't having it; nor did she think the Norwegian experience, where the government introduced quotas making it compulsory for companies to have 40 per cent of women on their boards, was a good one.
In fact, she was contemptuous, arguing that quotas have led to Norwegian women holding seven or eight NED jobs each. So? What's wrong with that? The former Conservative House of Lords Treasury spokesman omitted to say that she also sits on the boards of Carpetright and Severn Trent, is on the audit committee of both RBS and Severn, and is a co-director of the Thomson-Reuters Share Foundation. Not much free time, then.
As any thoughtful person will understand, taking the sort of brave leap which the Norwegians did requires time to work through, with constant updating and refining. All the people I've spoken to in Norway are pleased with the progress so far, but they know, too, that it's only by increasing the pipeline at the executive level, that they will get a supply of more women available in the pool for the NED roles. And it's only by having more women on the boards that you encourage more women to come up the executive level; so, a virtuous circle.
Quotas are imperfect; tackling sensitive issues always will be. But, as Norway has shown, taking bold decisions by introducing fixed quotas, and, in France, by threatening them, is having a dynamic impact on board composition and bringing about swift change. The French have set a quota that 40 per cent of the boards of leading firms should be female within five years, and since it was announced the number has shot up from 13 per cent to 20 per cent. French luxury-goods maker LVMH has gone even further, and has pledged to promote women so that they take up 30 per cent of its executive positions.
But the UK experience, since Davies suggested that a quarter of all NEDs be women by 2015, hasn't been great; in fact, it's lamentable. Only 33 companies from the FTSE 100 have bothered to inform him of their plans. And, of the 93 new board seats up for grabs since February, only 21 have gone to women. The number of women on FTSE 100 boards has only risen from 12.5 per cent to 14.2 per cent, and from 7.8 per cent to 9.9 per cent at the FTSE 250 firms, although half of these have no women at all on their boards. The really bad boys are those in the FTSE 300, but David Cameron hopes to shame them into action by writing them a letter; good luck to him.
If the increase continues at this rate it will take at least another 20 years to achieve the levels which everyone from top businessmen such as CBI president Sir Roger Carr to the Prime Minister agrees is not just fair, but also good for business. There's masses of research which shows that having more women on boards improves productivity and overall performance of companies, a point made again by Cameron last week.
You only have to look at Burberry, where two top women – Angela Ahrendts is chief executive and Stacey Cartwright is finance director – are enjoying spectacular success, demonstrating that big change only happens when diversity gets to a certain scale. This is a numbers game.
That's why listening to Noakes is so dispiriting. She speaks to the "only woman in the room syndrome" which dominates so many of our boardrooms, where the female directors seem to quite like being the queen bees and don't want other women around.
Oddly enough, men don't seem to mind having these personalities around them either, perhaps because they act like men. This is partly what's wrong with the present culture; all too often, the male relationships on the board have a touch of the homoerotic about them. And there's a tribal element to it all, too – a deep need in the male psyche to train younger colleagues in their own image.
One wonders if one of the reasons that Davies and Cameron are so resistant to fixed quotas is that they are listening to too many "only woman in the room" types. There are also a lot of senior women who secretly believe in fixed quotas, but who fear that if they say so publicly, they risk being seen as overly radical.
If Mr Cameron is so persuaded that having more women on boards is for the economic good, then he should waste no time – just take the plunge and set a date for fixed quotas. If he doesn't, the EU will do it for him, next March. Moving now could also help Cameron out on the women's vote he's so worried about losing, as I can't think of another single action which could be introduced – cost free – that would show the female population that he is serious about fairness. Nearly half the workforce is female, and half of all graduates are women; yet they are shut out from reaching their potential. (We need to make childcare tax-deductible, but that's for another day).
Those who argue against quotas claim that they create tokenism – that the women are there for show alone. But surely if all the compelling arguments dictate that company performance does increase with more women on boards, then that can't be true.
The other big obstacle often raised is the one of supply; that the gene pool of women is too small. This is rubbish – search firms will just have to look harder. The women are there, it's just that they are invisible, tucked away in marketing, or human resources – corners ignored by headhunters. In France, Christine Lagarde, now head of the IMF, was so fed up with businessmen bleating about how they couldn't find enough women that she sent them all a list of 50, just off the top of her head.
By all accounts, boards would be all the stronger for more diversity; you need at least three women to make a difference. Research also shows that women tend to be more challenging to "groupthink", more able to think "blue sky". It sounds as though the accountancy-trained Noakes needs more of them with her on the RBS board. On an earlier radio programme on the same day last week, the Radio Five presenter asked if she would ever tell a banker that his bonus was too big. Her reply? "I'm not sure I would be brave enough." Says it all.
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