Women make up over half the UK population, yet account for just 20% of board membership in FTSE 100 companies. Few would dispute that more needs to be done to redress the balance – the problem is finding an effective solution to rapidly overturn centuries of established practice and attitudes.
Business coaches Agnes Bamford and Helen Croft of The Results Centre (www.theresultscentre.com) look at the arguments for and against the introduction of quotas.
Women make up over half the UK population, yet account for just 20% of board membership in FTSE 100 companies. Few would dispute that more needs to be done to redress the balance – the problem is finding an effective solution to rapidly overturn centuries of established practice and attitudes.
Quotas have been suggested by some as the way forward, but this often provokes strong reactions. Whilst Norway has imposed a 40% quota law for women on public boards since 2008, a move since imitated by several other European countries, many in the UK remain fiercely opposed to such a move.
Arguments for and against
Supporters of the quota system maintain that gender diversity is good for business, whilst critics assert that it does little to improve profits –and may even reduce competitiveness. This is borne out by a study on Norway by the University of Michigan which found that where there was an increased presence of women on boards, companies reported slight losses on their bottom lines. One explanation for this could be that these women were likely to have less upper management experience. It’s also worth remembering that the benefits of long term change can take time to become apparent.
In support of the argument, research documented in the IMF report Women, Work & the Economy: Economic Gains from Gender Equity, suggests that gender equality at any level encourages participation at the levels below. As this would result in a more balanced pipeline, it would seem logical to assume that it would also facilitate a return to competitive selection at some point in the future.
In Norway, companies have found that having increased numbers of women at senior levels has corresponded with a higher overall level of education in the boardroom, whilst a study of British corporate boards reached the same conclusions. Norwegian studies have also found that the presence of more women on boards has led to more focused and strategic decision-making, increased communication and decreased conflict.
Other benefits of gender balance include improved corporate brand image, employee motivation and customer satisfaction. Furthermore, capital markets and investors are increasingly scrutinising gender diversity and including gender equality ratings as part of their investment criteria.
Looking at the alternatives
If we are to achieve the ideal of a more equal representation of women at the highest levels, quotas are just part of a possible solution. Ideally, other areas need to be considered if the workplace is to become a more equitable environment in the long term.
Combining work and family will always be a huge issue for parents, but at present, much of the pressure and responsibility surrounding childcare remains with the mother. However, there are practical ways of reducing that pressure.
Parental leave: the UK typically offers women up to one year and men two weeks at present. However, in Norway, after the initial 13 weeks post birth taken by the mother, the maternity/ paternity leave period can be taken by whichever parent the household chooses and is not dictated by corporate policy.
Childcare: this needs to be affordable, high quality and accessible – and ideally onsite.
Flexible working: this can help to redress gender imbalance and ease the workplace advancement bottleneck of childbirth.
Support programmes: mentoring, coaching and/or development programmes for women run as standard practice by businesses would improve progression and send a clear message of encouragement.
Changing the mindset
Not only is it difficult to effect the practical changes needed to fundamentally change practices, but women themselves can often be self-limiting in the workplace, with a mindset that impacts on their aspirations to equal employment opportunities at higher levels. In this context, quotas can provide a tremendous boost by creating positive role models. More importantly, they empower those who have the understanding and desire to initiate the changes needed to achieve a more equitable balance of work and home for those with young families and dependents.
Quotas certainly have their pitfalls, but they may be the quickest and most effective way of achieving the ideals of free choice, balance and equality. Furthermore, once boardroom equality has been achieved, there will be an equal and balanced pool of candidates at the sub executive level, resulting in the ideal of a truly fair and competitive selection process.
The Norwegian-British Chamber of Commerce (NBCC) is running a panel debate on the topic of women on boards in London on 16th October 2014. For more information, visit www.nbccuk.com/eventsm or email line.von.erpecom@nbccuk.com.
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Author background
Helen Croft and Agnes Bamford are partners at executive coaching company The Results Centre (www.theresultscentre.com). They have extensive experience coaching senior executives and facilitating groups who are dealing with transition. Originally from Norway, Agnes is a board member of the Norwegian-British Chamber of Commerce (NBCC) and specialises in intercultural coaching and communication. Helen’s focus is on performance during change, coaching individuals during periods of transition and progression. She has nearly 20 years’ experience in industry, and has worked extensively with women in business on issues surrounding mindset and confidence.
