The issue of Women on Boards has been a prevalent topic of discussion recently, in particular following the announcement that Burberry Chief Executive, Angela Ahrendts, will be joining the US company, Apple, leaving the number of women running FTSE 100 businesses to just two – Alison Cooper at Imperial Tobacco and Carolyn McCall, the Chief Executive at Easyjet. Women are being under represented at the top echelons of UK businesses and it remains to be seen what positive steps are being taken to change this.
Is a change needed?
Recent evidence demonstrates that a change is for the better. It has been shown that companies with strong female representation at board and the top management levels outperform their rivals, demonstrating a 42% higher return in sales and a 53% higher return on equity.
Therefore, Boards make better decisions and have a wider understanding of the sector they operate in when they are balanced. Yet despite this, it is anticipated that it will take more than 70 years to achieve the gender-balanced boardrooms needed if the UK continues at its current rate of change. The UK has only seen the percentage of women on FTSE 100 companies increase from 12.5% in 2010 to 15% in 2013.
Why are women under represented?
There has been much research into the reasons as to why Women struggle to reach levels of seniority and a few trends are becoming apparent.
One such trend focuses on the work environment, with many citing that women fail to operate successfully and break through the established ‘old boy’s network’. It is also believed that the higher you scale a business, the more likely male employers recruit in their own image, typically hiring men for senior positions.
Another trend focuses on the scarce availability of career advancement for women where child care and the desire to achieve an acceptable work/life balance act as blockers to any opportunities that do become available.
Notably, one trend focuses on the absence of female role models for future talent. Without current successful business women advocating, acting as ambassadors and mentoring younger women, it is unlikely that things will improve.
So what is being done to rectify this?
At the moment, the focus tends to be on a business-led approach, with little definitive decisions being made by the current UK government who have opted out of introducing quotas ensuring the potential for tokenism does not prevail. This is perhaps not a bad thing as, where quotas have been installed – in Norway for example, there runs a risk that the same female candidates will be appointed to sit on a variety of boards.
Therefore, we must turn to our businesses to lead the change. As a guideline, it has been recommended that all Chairman of FTSE 100 companies should be aiming for a minimum of 25% female representation. We must wait and see if this takes any positive effect.
As an employee of Berwick Partners, part of the Odgers Berndtson group, I am part of an organisation where female representation is prevalent. This is important, for future personal growth and development as there are a variety of female ambassadors spearheading change and singing out about their successes. Future talent, both male and female, is nurtured through positive mentoring schemes and attempts are made to support a more flexible work life balance. As other organisations develop to reflect this forward thinking attitude, I hold high hopes for the future of increased female representation on Boards.
Emma White is a Researcher within the Public Sector practice at Berwick Partners
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