Will Quotas get the right Women on Boards?

By | June 4, 2011

woman-boardroom-men-workingI recently attended a panel discussion on Women on Boards organised by Pinsent Masons in London. The discussion focused on the implications of the Davies Report of 2011 that established there was a long way to go to achieve gender equality on boards – and that the resulting lack of diversity has led to groupthink and poor decisions.

In 2010 women made only 12.5% of board membership in the UK – a very low percentage. A key debate is whether the government should introduce quotas to achieve greater gender diversity on boards. This was the very successful approach taken by the Norwegian government which in 2002 set a deadline of July 2005 for private listed companies to increase the proportion of women to 40% – full compliance being achieved by 2009.

The panel discussion was continued over drinks and canapés and swung backwards and forwards about the pros and cons of quotas.

1. Advantages of quotas for women on boards

Clear and achievable targets

Focus efforts and highlight issues

Rapid progress achievable

2. Disadvantages of quotas for women on boards

May result in best candidate not being selected

Can undermine women’s feelings of self-worth

Can undermine respect for women on the board

3. The pipeline of senior women for boardrooms

One of the problems often cited in securing women onto boards is the lack of a pipeline of senior women with the type of leadership and management experience that counts in the selection process. More women than men graduate from university, yet fewer women than men make it to the top of the career ladder. Is it something in the female psyche that inhibits their career? Is it due to different values with respect to work/life balance? Or is it due to the predominance of men ‘at the top’ promoting in their own image? Or maybe it is even simpler than that – women just don’t even think about the possibility of putting themselves forward for board positions?

4. Davies recommendations

The Davies report does not recommend the use of quotas in the first instance but suggests that all Chairmen of FTSE 350 companies should set targets for the percentage of women on their boards by 2013 and 2015, as well as a more systematic annual disclosure of the number of women on the board, in senior executive positions and as employees in the whole organisation.

5. How can women help themselves to get on boards?

So what should women do to address these issues? Some of the ideas that came up from the panel and the discussions afterwards were as follows

  • Build a network and make your interest in a board position known to your senior contacts in companies
  • Send your CV to the executive search companies explaining the benefits you can offer a board in terms of different perspectives and a more challenging approach to the status quo
  • Start with the public sector board appointments that are easier to secure and build your CV

6. Quotas or not?

I started off the evening with the view that quotas should not be necessary and would be demeaning for women. After all, good performance and the right attributes should be enough, shouldn’t they? But by the time I was collecting my coat to go home I had veered towards the view that positive action really must be taken – there is too much ‘establishment’ on boards to enable women to achieve the representation that they deserve.

What are your views?

About Dr Sarah Dixon

Dr Sarah Dixon, Dean of Bradford University School of Management, completed her MBA at Kingston University, subsequently joining them where she held a variety of roles, culminating in director of postgraduate programmes for the Faculty of Business and Law. Gaining a DBA from Henley Business School in the interim, she went on to research activity at the University of Bath taking on the role of head of MSc programmes.

Her business career at Royal Dutch Shell Group included petrochemicals business management in Vienna and Moscow and later positions in strategic planning and mergers and acquisitions in London. She moved into business consulting as director of the strategy consultancy, Albany Dixon Ltd before joining the School in September 2010.

Specialties: Strategy, Organizational change, Dynamic capabilities, Organisational learning

9 thoughts on “Will Quotas get the right Women on Boards?

  1. Alison Maitland

    It’s interesting to hear of your ‘conversion’ to quotas, Sarah. In Norway, most of the business world was opposed at first, and a poll of women showed them split 50/50. But today, having 40% women on boards is just accepted as ‘business as usual’. All the panellists at a Board Impact conference in Oslo last year, including those still opposed to quotas in theory, agreed that things would not have changed without quotas.

    The Davies Review was influenced by the fact that only 11% of respondents called for quotas, although a survey by the Institute of Leadership & Management found that nearly half of women managers supported them. So it’s important that you are speaking out on this. I don’t like the concept of quotas either, but I’ve come to the same conclusion as you after a decade of voluntary pressure that has made only minimal impact on the numbers. Since the Davies Review, the pace of female appointments has quickened, but is not yet running at the 1/3 women, 2/3 men that he recommends.

    Why is the UK so timid, only aiming for 30% women on boards by 2020 as an aspiration? That is an absurdly long time to wait when over 2,500 credible female candidates have been identified by Cranfield School of Management in FTSE companies alone. Other countries have chosen bolder targets of 40% – and sooner.

    We need much stronger action. Non-exec board positions should be advertised. Headhunters should stop fishing in the same narrow pool and work hard and imaginatively on searches. The Davies steering board should specify what pace of progress is required if companies are to avoid quotas. We should also stop talking about quotas as ‘positive action’ for women. This is about serving the long-term interests of business and the UK’s economic competitiveness.

  2. Victoria Tomlinson

    Like Sarah and Alison, I am adamantly against quotas in principle. It’s no good women fighting for equality and then looking for advantages. And every woman wants to land senior positions because they are the person who is going to make the most significant difference to that business – not because they wear a skirt.

    I carried out research into this issue two years ago with Yorkshire chairmen. The reasons why chairmen and headhunters believed there were few women on boards were
    • Very few women have the skills for most non-executive director briefs
    • Women may not be promoting themselves to headhunters as well as men
    • Women are not as proactive as men in approaching companies direct
    • Headhunters may still be narrow in the people they put forward on the long lists

    My personal conclusion was that much of the problem lay in how the brief was defined. One example was the brief for a non-exec – the key attribute was to have been finance director at a FTSE 250. The board wanted them to take over the chair of the audit committee in due course. By its nature there are not going to be many women on this shortlist.

    However, did the non-exec actually need to have been a finance director and from a FTSE? Or did they need skills in managing financial risks in complex businesses? I know several female entrepreneurs with finance qualifications running portfolios of companies. I cannot imagine a corporate having a more astute chair of an audit committee than one of these – but they will never fit the traditional male brief.

    Quotas would make headhunters rethink the briefs and for this reason I regrettably have come to support them.

    It should be said that the chairmen I spoke to talked about how hard they had had to work to get their board positions – and how they had seen really top male candidates never make it. Women have also got to wake up and smell the coffee. As Sarah says, women must make sure bosses, headhunters and companies know that they are interested – and get professional help to define their skills and what they will bring to a board.

    This is not entirely a male/female issue – it is very tough for everyone to win the top board positions and women need to learn these skills.

  3. Christopher Webb

    The current system doesn’t even seem to get the right men on some boards, so I can’t see that quotas for female board members would do any harm.

  4. Saeeda Ahmed

    I have many mixed feelings about this.

    In a patriarchal society, the systems will always be skewed towards systems that would define themselves with male requirements/characteristics and therefore make participation difficult as the model is not designed with the needs or interests of women.

    The key thing about quotas is that although it may increase the number of women on boards but on another level, it reduces the perceived value that the woman brings. This is because she has been included as a result of the quota rather than the desire from the organisation to make a genuinely participative board. The quota may create physical participation but not necessarily guarantee effective, meaningful participation or peer director acceptance. It probably will be better to have multi level approach which addresses a number of factors rather than just one over simplified response.

  5. Rosena

    I started a debate about quotas to increase female participation on Boards on the IOD site and it seemed to have struck a raw nerve with people.

    I agree with some of what you have all said, but I think on reflection unless there is a legislated requirement for businesses over a certain size to have representation from both sexes nothing will change. Someone pointed out that it will take 200 years at the current pace of change to get equal representation.

    What is most disappointing is that there is a great deal of denial that there is a problem by women and men, I like Christopher’s comment because the debate on the IOD site takes the premise that all male directors are brilliant and by implication is that there is a lack of talent amongst women which is clearly not the case.

    We have started a linked-in group called Women In Business UK which anyone who has an interest in this area is welcome to join. We would like to focus on action and have asked a freedom of information question about the make up of Central Government Boards, we are currently awaiting a response.

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  7. Sarah Dixon

    Thank you to everyone who has commented on the issue of quotas for women on boards. Some of the key themes emerging are:
    • Intolerably low aspirations for women on boards – only 30% by 2020 (Alison)
    • Recruitment of board members in own image disadvantages women – the patriarchal society (Saeeda)
    • Focus on financial directors both reduces opportunities for women and, more importantly, creates a dangerous bias and lack of breadth of vision (Victoria)
    • Could women do any worse than the men currently on boards? (Christopher)
    • The need for legislation to achieve more rapid progress (Rosena)

    In connection with the last point it was interesting to read in The Times last week http://www.thetimes.co.uk/tto/news/politics/article3073302.ece Harriet Harman’s proposal to have a woman automatically appointed to one of the two top leadership posts in the Labour Party. The Leader in The Times was headed ‘Quotas for women in politics are still needed’ http://www.thetimes.co.uk/tto/opinion/leaders/article3074571.ece. Only 20% of our MPs are women.

    Is the problem about legislation linked to the patriarchal society as identified by Saeeda above? Since it is predominantly men in positions of power in government and the likelihood of that changing is low, is it unlikely that could be a drive for legislation in favour of women on boards? Which raises the interesting question: Did Margaret Thatcher miss a trick?

  8. Pat Chapman-Pincher

    I used to be opposed to quotas until I was appointed to a Norewegian Board as a result of the quota system,
    Women on Boards are now totally accepted in Norway – the only issue is whether they can do the job.
    The idea that widening the pool from which Directors are chosen will result in the best candidate not being selected is a nonsense. In the past (it is improving) the talent pool from which Directors were selected consisted almost entirely of white, anglo-saxon, males who sat on each other’s Boards. If you have any illusion that these were the “best candidates” then a look at the Board of RBS should clear up that misconception.
    The job of a non-executive Director requires common sense, a strong moral compass, confidence to speak your mind, and the abiltly to work hard at understanding the company and the rules of governance. All of those are within the grasp of a competent woman. Respect on Boards is won by doing the job well – that is true for both men and women.
    There is a large pool of women who could serve on Boards. They need to have the confidence to apply and make a difference. If quotas help this then that can only be for the good.

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