When Catalyst President and CEO, Deborah Gillis, arrived in London a few years ago she was astonished to find herself having an animated conversation with a male customs officer about women on boards. Unlike in the United States, Deborah was delighted to see that the issue had become a ‘watercooler’ conversation.
It’s only right that we are concerned about the make-up of board rooms when their decisions are impacting our daily lives from what we eat for breakfast, wear to work, the medicine we have access to, and how we relax; and yet they spectacularly fail to reflect the diversity of the UK or the global marketplace.
In the two years since the FTSE 100 was lauded for surpassing its target of 25 per cent women on boards, a great achievement from a paltry 12.5 per cent in 2011, it’s still only hovering around the 26 per cent mark. While the FTSE 350, which has been tasked with reaching 33 per cent women on boards by 2020, is stuck around the 16 per cent figure. This situation is mirrored in the US too, where women hold only 19.9 per cent of board seats at S&P 500 companies.
When managed well, diverse teams think differently and are more innovative and more creative in solving problems; and in today’s economy this can make the difference between a company having or not having the competitive edge in its industry. How can you represent your customers if you don’t reflect them?
It’s no secret that many boards look as though they are stuck in a time warp circa 1951, inhabited by white, middle-aged men in suits. Nicky Morgan, the former Equalities Minister, bemoaned the strange juxtaposition that there are “still more [people] called John chairing FTSE 100 boards than there are women.” While women are scarce, ethnic minority women are almost invisible and particularly when more than half of FTSE 100 companies do not even have a BAME (Black, Asian and ethnic minority) director.
We know that board rooms can suffer from a lack of turnover, blocking fresh talent. They are also often a closed network, all about who you know, with an ‘insider’s club’ atmosphere leading to boards’ members appointing new members who often look like themselves. This has left many talented employees, and particularly women, on the sidelines. It could also, in part, become a self-fulfilling prophesy, as it’s hard to be what you can’t see. Almost two-thirds of women, according to Catalyst, reported a lack of senior or visibly successful woman role models as a major obstacle to their advancement.
Women face many frustrating challenges to their advancement in the workplace including gender stereotypes, unconscious biases, a lack of access to informal networks (how is your golf or rugby knowledge for instance?) sexism and more, and women can’t solve this alone.
One solution is for more senior men to sponsor women. Sponsorship taps into the way business works: a person in a position of power uses their power to open doors, advocate for, and help someone else (in this case a woman) advance. The Catalyst Women On Board™ programme, for instance, makes sponsorship a reality. And sponsorship is a deliberate way to make change happen.
The advancement of women into senior leadership roles needs to be treated like any other business objective. At Sodexo, a Catalyst Award winner, senior managers’ and executives’ bonuses are linked to meeting gender and diversity goals. A strong incentive if ever there was one. We believe changes will be made and will be long lasting if more companies were to embrace such strategies.
Women need to be getting the right opportunities; be given profit and loss roles early on in their careers; and receive those high-profile international assignments, we call the ‘hot jobs’, that Catalyst research has shown can propel individuals to the top.
An excellent example of a business leader who understands their responsibility to be the change is Inge G. Thulin, Chairman of the Board, President and CEO at 3M. With its Catalyst Award-winning global initiative specifically targeting the company’s women employees, women’s representation at the director level increased from 18.2% to 23.0% and at the vice president and above levels from 16.7% to 24.2% during a five-year period (2011–16).
Women are also very effective at ‘pulling up’ other women. We found 73 per cent of women who were developing others were developing female talent compared to only 30 per cent of men who were developing female talent. Another recent report found that companies with a woman CEO had almost twice as many women board members as those with a male CEO.
With women globally controlling 64 per cent of household spending, which is predicted to rise to $40 trillion by 2018, companies cannot expect to compete effectively only using the talents of half the population. Board members need a diversity of experiences, talents, and perspectives to be successful. It’s not a question of gender: it’s about getting the most talented people to the table.