Whilst the applause is still ringing in our ears after the Davies Review found that 25% female boardroom representation has now been achieved within FTSE 100 companies, a new set of figures suggests those celebrations might be premature. A study by European Women on Boards (EWoB) looked at how 600 listed companies on the Stoxx Europe 600 index have fared in terms of gender diversity in the boardroom over the last five years. And the UK ranks pretty badly.
According to the report, within the UK’s largest 187 companies women hold just 23% of board roles. In the context of the Davies Review, that doesn’t sound too bad. However in a European context, this figure places us a miserable eighth out of 12 European countries, a drop of two places since 2011. Maybe it’s not so surprising that we are well behind quota-aided Norway – which registers an impressive 39%) – but we are also significantly lagging behind Sweden and Finland, both of which have achieved 30% without any quotas. And on a separate but related point, the UK still doesn’t have targets for the number of women in executive as opposed to non-executive board roles.
There were some crumbs of comfort: the report praised the quality of reporting on board appointments by UK firms. In addition, British companies were more likely to have women leading the influential nomination, remuneration and audit committees than on average. Across Europe, women made up 29% of audit committees, 26% of remuneration committees and 23% of nomination committees. But, as important as these committees are, they aren’t the main board.
The EWoB data isn’t the only recent clue that UK progress on board-level diversity isn’t as rosy as we might hope. Only last month the Equality and Human Rights Commission found that just 47% of UK companies had actually increased their female board representation over the five-year period of Davies’ enquiry – many had simply reduced the size of their board, making the proportions more favourable to women without actually appointing any more women.
So it’s tempting to think about some of the more radical ways we could effect change. I recently wrote a tongue-in-cheek piece about the need for a Female Stock Exchange as a way of redressing the lack of women on FTSE boards. My Female Stock Exchange would help innovative female-run companies with a commitment to gender diversity to raise money from like-minded investors. There was no soft-hearted liberalism in my plan: companies seeking to list would have to be capable of delivering financial returns. I like the idea of a platform for helping companies with female co-founders or CEOs along the lines of digital transformation company Freeformers, co-founded by chief operating officer Emma Cerrone, or the maker of the innovative projection bike light Blaze, founded by chief executive Emily Brooke, to raise capital from investors who share their values.
While my light-hearted Female Stock Exchange piece was theoretical, the real world success of the Women’s Equality Party (WEP) in the recent London mayoral elections suggests that gender-focused organisations could be on the rise. Only a year after being set up by comedian Sandi Toksvig and author and journalist Catherine Mayer, the WEP attracted 250,000 votes – or 2% of the vote – in the capital, led by Sophie Walker, the journalist and ambassador for the National Autistic Society . This is an impressive achievement for such a young party and shows the appeal of a platform created for female pragmatists fed up of the mainstream parties seemingly ignoring their concerns.
But, in my view, the rise of single-gendered organisations like WEP also is a worrying development. Don’t get me wrong: it’s great that it is campaigning for things like equal pay and the eradication of violence against women and girls. Our interests overlap in our mutual belief in equal representation in business, industry and politics, although I strongly disagree with WEP that quotas are the way forward. I am just sad that women feel so alienated from the main parties that they felt there was a need to set up a political party about purely women’s issues.
If you translate WEP’s example into the business world, there is a real risk that if women feel there is no room for them in UK FTSE boardrooms, not to mention in other prominent UK organisations and institutions, they will simply replicate the modus operandi that has clearly worked so well for men and build female only networks, recruit to female-dominated boards from a limited pool of other women using the old girls’ network.
And while part of me finds this idea hugely entertaining, given the recent Grant Thornton report revealing that the opportunity cost to the UK of male only boards is £51bn, the reality is that British business would quite literally be the poorer for it.