Time to shake up the boardroom
The UK’s top companies should recruit more women to their boards, a Fawcett Society report concludes in its review of the board recruitment practices of FTSE companies.
Top companies should confront the problems produced by unconscious bias and the operation of the old boys’ club, should set aspirational targets for the appointment of women to their boards, and further should report annually on the progress they have made towards attaining those targets.
Although the Davies Review ‘Women on Boards 2015’ has found that women now comprise 23.5 per cent of the board directors of FTSE 100 companies and 18 per cent of the board directors of FTSE 250 companies, Fawcett believes that progress is still too slow and that more needs to be done to achieve gender parity.
Companies could take two positive steps to increase diversity and ensure a more positive recruitment outcome. First, they should instruct only those executive search firms which adhere to recognised industry codes of conduct on diversity and inclusion.
Second, companies should consider the benefits of widespread advertising to fill their board vacancies rather than relying on the old boys’ network and the existing databases of executive search firms. Increased advertising would signal a company’s commitment to diversity, promote transparency but most importantly would encourage those outside traditional networks to apply. This would have the double benefit of widening the known talent pool for any particular appointment and of increasing the list of possible candidates available to search firms asked to fill board vacancies.
The overall headline figure of 23.5 per cent of women on FTSE 100 boards masks the fact that only a paltry 8.6 per cent of executive as opposed to non-executive positions are held by women. Fawcett considers that companies need to find ways to deal more effectively with barriers to diversity such as unhelpful workplace cultures, the effects of maternity leave, and the lack of genuine sponsorship for women. If fewer women than men progress to the higher corporate echelons, no matter how open-minded and diligent search firms are, they will inevitably be able to identify fewer female than male candidates for executive positions. The best recruitment policy that a FTSE company can follow is to hardwire diversity and inclusion in its own organisational practices and to foster its own indigenous talent, particularly its female talent.
Companies should also heed a recent government report which concluded that top companies are over-recruiting from too narrow a talent pool, and that this harms both social mobility and the performance of the companies themselves. The re-writing of their policies in respect of women’s inclusion should be seen as only a first step in a proper process of ensuring equality and diversity in the work-place.
Belinda Phipps, Chair of The Fawcett Society, said:
“Equality is no longer an optional extra or about being on the right side of history. Diversity on boards brings extensive business benefits and boosts economic success. FTSE companies need to be more effective at finding and harnessing talent. A board is a dynamic team which needs new viewpoints and different skills, not a group of people of similar backgrounds who follow the same thought patterns.”
The Fawcett Society report, FTSE 100 and 250 Board Directors: Recruitment and Appointment Practices was produced in response to the Equality and Human Rights Commission’s consultation on FTSE board recruitment.
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