Women For Boards.  Too Little, Too Late?


1.  Will quotas get the right women on board?

2. Third Annual Review by Lord Davies.

3.  Editorial commentary and additional comments


Will Quotas Get the Right Women on Board? 

A blog of June 4, 2011 by

Dr Sarah Dixon(1)


I 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.

(1) Author Bio:

We are once more grateful to Dr Dixon for her unreserved agreement to our re-publishing her article.  Dr Dixon is Dean of the International Business School Suzhou (IBSS) at the University of Liverpool.


Third Annual Review of Women on Boards Report

Foreword (March 2014) by:

Lord Davies of Abersoch

Since we launched the Women on Boards Report in 2011, we have seen real progress made to increase the number of women on FTSE 350 Boards. We are finally seeing a culture change take place right at the very heart of British business. Every week we see women in the workplace in the media; it is a hot topic and I am proud that the Women on Boards Report has been a catalyst for action.

Women’s representation on FTSE 100 boards now stands at 20.7%, up from 12.5% in 2011, with only two all male boards remaining. The FTSE 250 have achieved 15.6%, up from 7.8% in 2011 - with 83 of the FTSE 250 all male boards in 2011 now having recruited one or more women onto their boards.

Strengthening the executive pipeline remains a longer term task. We have seen that increasing the number of women at board level is significantly impacting the way companies look at the talent pipeline; opening up new opportunities for women in the organisation.

This is all clear evidence the voluntary approach is being grasped by British business, and is working.

At the start of our review, we were overwhelmed by voices from Chairmen, companies and others asking for a business led voluntary framework, as opposed to legislative quotas or EU intervention. British business said they could fix this on their own. The world is now watching with real interest to see if they can. We need to turn these words into action, to raise the bar and to prove it.

Yes, the home straight is in sight, but we will not reach our goal of 25% representation by 2015 without re-doubling efforts. We need fewer than 50 women to be appointed to FTSE 100 boards in the next 18 months for UK plc to meet the target set. This is not as hard as some would like to make out; there are many, many talented women with the relevant expertise and experience to serve on FTSE 100 boards. They may not be as visible at first sight or as obvious as their male counterparts, nor may they be found through traditional routes, but they are there.

When we reach the 25% target, we will have doubled the percentage of women on boards since 2011. This clearly isn’t gender parity but it is a strong foundation and major milestone in a longer journey.

I would also like to take this opportunity to thank the many Chairmen, CEOs, HR directors, businesses, journalists and individual business men and women whose commitment to this issue has been, and remains, unstinting. In particular I would like to thank my fellow Steering Group members, Barclays and Cranfield for their constant support.


Editorial Commentary and Additional Comments


The introduction of a 40% quota for female directors of listed companies in Norway in 2006 established a precedent.  In theory, there were sanctions for companies who failed to comply with the law, such as forcible dissolution.  In practice, so far, these have not been applied.

Other countries followed suit.  Among them Belgium, Iceland, Italy, the Netherlands and Spain.  But with varying sanctions. Other countries have established modified quotas, applicable to state-controlled institutions only, or with the threat of quotas if the number of female board members are not voluntarily increased.  The former includes Malaysia and Brazil.  The latter includes - in addition to the UK - Australia and Sweden.

An Economist article of March 25, 2014 mentions the concern that introducing a quota "would actually decrease diversity by forcing companies to dive for the same small pool of eligible women, nicknamed the "golden skirts". In fact, Norway still has more "golden trousers"—male directors are twice as likely to sit on more than one board. Nor did it obviously lead to less qualified boards: female Norwegian board members are more likely to have a degree than male ones."

In November 2013, the European Parliament in Strasbourg voted overwhelmingly in favour of a draft law that would require boards to have a minimum of two-fifths female members by 2020.(2)  This would, however, become law only with the backing of EU member states.  In this connection it is salutary to note that in April 2013 the German Chancellor,Angela Merkel, persuaded members of her political party, the Christian Democratic Union, to defeat a measure in Parliament which would have mandated that twenty per cent of public companies’ supervisory boards be comprised of women by 2018; that proportion would have risen to forty per cent by 2023.

Subsequently, however, with parliamentary elections approaching, Merkel appeased a dissenting bloc of her party, which wanted the reforms, by agreeing to write a gender quota into the party's election manifesto.  Since then, the Christian Democrats and their new partners the Social Democrats have agreed that by 2016 supervisory boards at German public companies should be made up of at least thirty per cent women.

But Germany has a long history of resistance to female incursion into what has been traditionally regarded as a male domain, such as corporate life.  This is particularly the case in male-dominated areas such as chemicals, technology and construction, where the number of female graduates is relatively low.  The adoption of the quota measure has been greeted by Annette Widmann-Mauz (The Christian Democratic Union negotiator with the Social Democrats) as "a cultural shift in the corporate sector".?

Charlotte Laurent-Ottomane, of the Thirty Percent Coalition, an American lobbying group devoted to having women fill thirty per cent of U.S. board seats by 2015, feels that companies will start to see better corporate governance when at least thirty per cent women sit on boards. With that critical mass, she felt, female board members are more likely to speak out, pose challenging questions, and encourage the entire group to become more collaborative and less hierarchical.

Other research, though, appears to show that female representation on boards may not make much of a difference to a company’s performance. A 2011 study by two University of Michigan professors showed that the stock price of Norwegian companies actually dropped when they began adding women to their boards to comply with the country’s requirement that women comprise forty per cent of supervisory bodies. (“The quota led to younger and less experienced boards, increases in leverage and acquisitions, and deterioration in operating performance, consistent with less capable boards,” according to the study.)

Better performance by companies with female board members doesn’t necessarily suggest that the women led to the stronger performance, it could also mean that companies that are financially successful tend to be more inclusive. Last year, professors at the Stanford University Graduate School of Business and the University of Edinburgh examined two thousand firms and found that larger companies with bigger boards were more likely to add women.

The Credit Suisse Research Institute, acknowledging that it’s hard to make sense of the many confusing and contradictory findings,  studied publicly traded companies and found that, over the past six years, the share prices of companies with at least one woman on the board outperformed those with no women on the board.  Interestingly, while performance seemed to have little correlation with female board membership when the economy was booming, from 2005 to 2007, this changed with the recession. From 2008 to 2012, the stock prices of companies with at least one female board member were, on average, twenty-six per cent higher than for companies with no female board members. The authors concluded that “more balance on the board brings less volatility and more balance through the cycle.”

And, reverting to Germany, Hagen Lindstädt, a management professor at the Karlsruhe Institute of Technology believes advocates of gender diversity should stay away from arguing that female leadership boosts financial performance—not because it’s untrue, necessarily, but because it shouldn’t be relevant to the conversation. There are plenty of reasons to improve women’s representation on boards that have nothing to do with financial performance—among them, for diversity’s sake. “This is about equality in our society,” Lindstädt said, “and fairness for all women.”


“So much of what it takes to be a leader has been historically defined by men, and while I was determined to be a leader, the last thing in the world I was going to do was to try to be like a man so that I could be taken seriously. I had to continue to be myself and create a leadership style that worked for me. I’m just not capable of being anyone other than who I am.”  -  Libby Sartain of Yahoo! Inc. 


Additional comments by Penelope Waite

So what is it precisely that is keeping women back from filling more places around the boardroom table?  Is it our own reluctance to press our merits against our (presumedly) more aggressive male colleagues?  Or is it that those same dogged males are resistant to the claims of aggressive - or even passive-aggressive - female colleagues?

Women often complain about the unfairness of male attitude and perception.    If a man has an overbearing management style he is perceived as someone driving forward to get results.  But when a woman starts to betray that character, she is usually portrayed  as a cold -hearted harridan.    

On the other hand, if a man is lenient with people who break rules, he is usually considered to be showing his human side.  Yet a woman doing  the same is regarded  as being weak.

It is surely true that to get to the top in a male-dominated environment, the female has to display the sort of bellicosity that led to Golda Meir being described as the only member of the Israeli cabinet with balls.  The sort of claim that might equally have been levied at Margaret Thatcher surrounded by her team of "wets".  Let me throw three more names into the pot: Oprah Winfrey, Indira Gandhi, and Angela Merkel.  Completely different characters, from totally different environments, but all displaying what management consultants Caliper revealed in a survey in 2005, namely that women leaders are more assertive and persuasive, have a stronger need to get things done, and are more willing to take risks than male leaders.

This was repeated by Caliper  in another survey conducted in 2013, adding that women learn from adversity and carry on with an "I'll show you" attitude, and display a team-building leadership style of problem solving and decision making. 

According to Herb Greenberg, Caliper's CEO, women leaders were also found to be more empathic and flexible, as well as stronger in interpersonal skills than their male counterparts.  "These qualities combine to create a leadership style that is inclusive, open, consensus building, collaborative and collegial".

But often it is not men who are impeding women from holding top managerial positions so much as women themselves who frustrate their own progress.  Historically it has always been the case that we have been our own worst enemies in pressing for our own advancement.  This probably has a well-founded sociological basis, springing from our natural role as mothers and home-makers compared with the hunter-gather-protector role of men.  When, in the 1950s, a referendum was held in Switzerland on conferring voting rights to women, the issue was rejected by an overwhelming majority that consisted mainly of . . . women!  A comment by one woman  at the time was: "We don't want the vote.  We prefer to leave it to the men.  But then we tell them what to do.  And then we don't have to take responsibility. We are more effective as wives than we would be as lawmakers."  There may be something of the apocryphal in that, but undoubtedly there remains an element of belief that "we can achieve more if we let our men think they are in charge".  Thank heavens this is now changing.  But it is changing too slowly.  The targets being set will eventually be met, no doubt, but they will be met despite, not because of, female activity.

Lord Davies's comments in his foreword to the Third Annual Review would be laughable, were they not so pathetic.  He seems to be expressing pride in the fact that he has failed to achieve his targets.

The EU Report has acknowledged this and, in fairness to Lord Davies, they recognise that this is a failure on the part of several countries in the Union.  But the United Kingdom is surely more advanced in terms of gender equality than some of the more backward nations that are included in the list.  Here is a part of the preamble to the EU Report (2):

"Recognising the many benefits associated with having gender balance on company boards, including economic ones, a number of national governments have taken initiatives and in some cases legislative measures to encourage or enforce change. Across Europe, social partners, individual companies and other relevant stakeholders are also working to facilitate and support the recognition and development of women’s talents, and to break down the barriers that limit their access to leadership positions. Notwithstanding these efforts, the rate of change in most Member States has been slow, which indicates that there is insufficient commitment and that self-regulation does not bring about substantial and rapid change.  [The italics are mine.]  Hence, following an extensive public consultation, the European Commission - with the strong support of the European Parliament and a number of Member States - has decided to take legislative action at EU level. The European Economic and Social Committee and the Committee of Regions have also backed this initiative." 

The preamble continues:  "Ensuring gender equality is one of the EU's main objectives and tasks. It is also a necessary condition for the achievement of the objectives of the Europe 2020 strategy – the EU’s growth strategy, which leans on knowledge, competences and innovation. Despite significant progress during the last decades thanks to regulatory pressure, gender inequalities persist in leadership positions and the pace of change is slow in many Member States. In response, the European Commission has reaffirmed its commitment to work to improve the situation by making gender equality in decision-making one of the five priority areas in both the Women’s Charter and the Strategy for Equality between Women and Men (2010-2015). the under-utilisation of the skills of highly qualified and experienced women constitutes a loss of economic growth potential. Research from various countries suggests that companies with a higher representation of women at the most senior levels deliver stronger organisational and financial performance as well as better corporate governance. Moreover, the lack of women in leadership positions means that female talent is being underused, human capital wasted and the quality of appointments to the highest positions may be compromised."

Ensuring gender equality is not simply a question of fairness.  It makes total business sense to use and promote the best talent, regardless of gender.  There is a further concern that needs to be addressed and that is the imbalance in roles and areas where women are concentrated.  There is a higher percentage of women in human resources and marketing than in finance or operations.  There are more women in retail or nursing leadership positions and less in construction or banking.

In January 2013 a report undertaken by Women in Mining (UK) (3) found that "mining is the worst sector for gender diversity – worse than the oil and gas industry – with just 5% of board seats held by women in the top 500 mining companies."  It also stated that "there are more women in senior executive positions in South African-listed mining companies, while London-listed mining companies have the least representation of women in senior executive positions."

And - significantly - "In addition to the case for greater gender equality, a growing body of evidence suggests that stronger financial performance, improved governance and reduced risk of bankruptcy are associated with the participation of women on corporate boards and in senior management positions. However, there are diverse views, including amongst women, as how to achieve greater gender diversity."

If this represents an accurate assessment of the situation - and there seems to be no reason to doubt it - and if, as seems equally plausible, it can be applied to other industries than mining, then it is not simply a matter of equal opportunity or gender diversity, but of good governance.  An organisation seeking to achieve its peak performance will have to face the fact that by denying the right of a significant portion of the labour force to hold important positions on its board, it is effectively ensuring that it is depriving the organisation of best corporate governance.

Possibly it is time for another Emmeline Pankhurst and Emily Davison.  Well, perhaps not the latter in actuality.  But the spirit of both might not be misplaced.



(2)  The full text of the 2013 EU report on gender equality may be seen in pdf by clicking on the url below


(3)  This was the first of three reports undertaken by Women in Mining (UK) in conjunction with sponsors Anglo American, Rio Tinto, PwC and Latham & Watkins designed to widen the already well discussed debate about the lack of representation of women on boards to the mining industry.

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