I read Lord Davies’ report on women in the boardroom on the day it came out and listened to much of the coverage.
As you might expect, the responses to this issue are polarised. On the one hand, some argue that appointments made on merit alone will provide the best outcomes for business, and that therefore an absence of female board members must just mean there is a lack of suitable women – whether as a result of capability or desire. On the other, there is a view that boards appoint in their own image, so male-dominated boards will always be the case irrespective of the number of talented women out there. The latter group also argues that without compulsion, women will continue to hit the metaphorical glass ceiling. As long as women are under-represented on boards, there will always be black and white responses to this topic – but I think things are a bit more grey that that.
Unlike the actions other countries such as Norway have taken to address this issue, Lord Davies’ recommendations to our government shied away from imposing mandatory quotas for women on listed company boards. But a firm warning has been given that if the number of women on FTSE boards does not radically increase (with 25 percent female representation on boards by 2015 being seen as an achievable figure), compulsion to do so could follow. That got me thinking – not only about my personal position as a female chief executive, but also about the situation within the charity sector and the role we might play in increasing diversity across all sectors.
This is not a one-gender problem but rather, it affects everybody. In my case, my earning capacity outstripped my husband’s quite early on so, when we decided to have a family, it made no sense for me to give up work. Our personal desire was to have one of us raising the kids, so my husband gave up his work and became a house husband. This has meant that I have been able to juggle having four children and a career. But it has meant sacrifice. I did hold back from going for top positions until I felt my children were old enough to deal with having me around less. This is my first CEO role and if I’d taken one on before now, I think I would have struggled. Is it any different for a man? Never having being one I can’t say for sure, but my perception is that it is. For example, taking about a year ‘out’ in reasonably sizable chunks over the last 14 years, through maternity leave, did interrupt my career flow.
I don’t think I’ve been personally or intentionally held back by others, but rather that the environment that comes with senior roles has not been conducive to the work/life balance I needed. But I do think that others have been held back by gender bias. I’ve witnessed examples – though I am sure those doing the appointing genuinely did not recognise any reluctance to appoint being because the candidate was a woman. I’ve seen the failure to promote a highly capable woman to an all-male board, in a private sector setting, on the basis that she “did not fit”. Code for “[she’s] not like us”, perhaps?
It is my view that boards need to get better at properly assessing merit, welcoming difference of approach and mindset as qualities worth having. Is “merit” sometimes used to justify filtering out aspects of a candidate which would, if only those appointing could see, bring stretch, challenge and better risk management to the board – in other words, whether by mistake or by design, filtering out suitable female candidates? Perhaps it is this celebration of diversity and a willingness to try new things that means women are more likely to reach the top roles in charities.
At a recent women’s group meeting held by the Association of Chief Executives of Voluntary Organisations (ACEVO), The Fawcett Society’s head of fundraising and development put the number of women in CEO positions in the sector at 46 percent. The UK Civil Society Almanac shows that women make up 68 percent of the total workforce in the sector (as against 65 percent in the public sector and 34 percent in the private). I did a quick and dirty review of the CEOs and finance directors of the top 100 charities by income. While it can’t be quoted as 100 percent reliable, on the basis of the information I could find at least 24 percent of the CEOs and 18 percent of the FDs were women. If you dropped down to the top 350 I am sure that number would rise considerably.
So, while far from equal, why do we have significantly more females in senior positions within the charity sector? What are we getting right? Is it a better work/life balance? Is it the perception of understanding and a values rather than profit-driven culture? Maybe it’s the support that women can get within the sector from peer groups such as Groundbreakers and other sector-specific umbrella body support groups. Equality and diversity are at the heart of what we do in the sector. For my organisation, we consider that supporting all finance professionals is key to the efficiency and effectiveness of the sector. For us that means that as the number of female finance professionals grows, we must be responsive to meeting their needs and, for our own part, we’re currently exploring the merit of a women’s special interest group. Perhaps the private sector should take a leaf from our book?
So, can the charity sector itself encourage diversity elsewhere? I’ve been thinking a lot about investment policies of late and it strikes me that one way we could play a role in incentivising greater diversity is through our investment policies. I know the responsible investment adviser Eiris, for example, can support investment choices which, among other selection criteria, can take into account the diversity of a board of a company in which shares would be held. There does appear to be a wider trend towards this type of ‘responsible’ investing – increasingly organisations are signing up to the United Nations’ Principles for Responsible Investment, which aim to encourage the consideration of environmental, social and corporate governance issues.
Here is a challenge to charity FDs, then: why don’t you start looking to screen out companies who do not appoint more women – who fail to make progress towards a 25 percent ratio? The recent consultation on CC14 (The Charity Commission’s basic principles on investment of charitable funds) makes it clear that such use of investments could be permissible. A recent non-academic study by an asset management firm found that operational and share price performance was significantly higher for FTSE-listed companies with women making up more than 20 percent of the board members, compared with those with lower female representation. So it’s worth taking seriously.
On balance, I agree with the contents of the report. I don’t want to be appointed purely because I am a woman, but rather, because I am the best person for the job. Those doing the appointing need to be supported and held to account in equal measure – supported both to understand a wider range of candidates (whose experiences may have been acquired in an entirely different manner to their own) and to better accommodate the needs of this wider pool and held to account by challenge and, if necessary, intervention.
As dawn breaks on a new financial year, George Bull, senior tax partner at RSM, looks at some of the new challenges ahead for FDs
With ‘cost reduction’ the top strategic priority for UK companies in a Deloitte survey, Simon Brew, consulting partner at the firm, discusses how companies should approach costs in the face of disruption and uncertainty
A new Financial Director webinar, sponsored by Oracle, delves into the major risks and challenges identified by CFOs worldwide. Our panel will discuss how CFOs can protect against these risks, and take advantage of opportunities created by an uncertain environment
Rob Douglas of Adaptive Insights examines how CFOs can actively drive business results with data-driven insights