A startling title and whilst it’s one we know to be utter nonsense (I only used it to get your attention), there are still companies which seem to be subscribed to that antiquated ideology, as evidenced by the continued absence of women in their boardroom.
Whilst this topic has been in the political spotlight for decades, it’s interesting to look back and reflect just how far we have come in diversifying the global professional workforce and the attitudes around it, but how have we achieved this? Time? The realisation that Emily Pankhurst may have had a point, the fact that it’s inexcusable or that companies under female leadership actually do very well, and – according to some studies – even better than companies under male leadership. Oooof!
According to a report by Grant Thornton recently published in The Guardian, public companies with male-only executive boards allegedly missed out on £430bn of investment returns last year. The report went on to show that only one in ten of the companies surveyed had female board executives. The UK’s share of the forfeited returns was £49bn or about 3% of GDP. In the US the amount was a staggering £373bn.
In the FTSE100 index we now have six female CEOs, leading some of the most successful businesses in the world. According to Lord Davies of Abersoch’s annual report (the chap responsible for driving the analysis behind corporate diversity), almost a quarter of all FTSE 100 board positions are being filled by women which doubles the figure from four years ago. A target was to have 25% of the FTSE board community populated by women by 2015. We pretty much nailed it, surely? Well, not really – only 8.6% of are actually in executive directorships, and the figure is skewed by those sitting on boards in a non-exec/advisory capacity.
The report also shows British businesses making great strides towards Lord Davies’s target of 33% by 2020, a figure sadly perceived by consensus to be where diversity plateaus.
What??? (sound of phono-needle dragging across the 45). So we’re saying that 33% is the best we can ever do? That full diversity will never (and can never) be achieved? Surely not? Surely we must just keep going, recognising that making rightful equality is important and achievable.
The Grant Thornton report mentioned earlier sheds further light on the benefits of women in the boardroom with previous studies finding that female directors provide a different perspective on subjects ranging from what customers want to risky corporate ventures.
Furthermore, it has shown that companies perform better when they have at least one female executive on the board. So why are so many businesses making such a meal of it?
Francesca Lagerberg, global leader for tax services at Grant Thornton, said: “There is a large opportunity cost for companies associated with male-only executive boards. Those businesses stuck in the past are not fully unlocking their growth potential. Like a world still addicted to fossil fuels, these companies are suffering now.”
“In an era when productivity-puzzles persist and economies trade within globalised markets, facilitating female participation at a decision-making level within companies might just give them a competitive advantage.”
It’s certainly strange when one considers that across the Fortune 500 community, companies with the highest representation of female board directors achieved remarkably higher financial performances than those with the lowest representation of women board directors.
Hastings and Worldpay, two companies which recently floated as two of the UK’s largest IPOs have been criticised for having no women on their leadership boards. In Worldpay’s defence, it has just appointed a new female NED, but neither company has any women in executive decision-making positions. Is it appalling that these companies have not embraced the importance of diversity and not dealt with it more seriously?
Twitter is a prime example of an organisation making an utter train-wreck of its diversity programme. They hired a new head of diversity – a much needed role; and Jeffrey Siminoff (ex. Apple) is the lucky guy with an impressive CV. More importantly, Twitter (one of the most prominent companies in the public gaze), where only 3% of their workforce is black or Hispanic, could have made a landmark statement by hiring a person of racial or gender minority into what is an iconic role. Siminoff is a white man in a company full of white men.
(sound of phono-needle dragging across the 45….again).
Well done Twitter, #embarrassing!