For 20 years I rejected the idea of forcing firms to put women on their boards. But nothing has changed
In 1991 Kathleen O'Donovan was named the first female finance director of BTR, once the British Tyre and Rubber Company and then one of the UK's top 100 public firms. Such was the significance of her appointment that the Financial Times carried a large and suitably glamorous picture of Ms O'Donovan on its front page. It was regarded as a turning point: she would surely be the first of many, as the have-it-all generation of women stormed the highest echelons of business.
Fast forward 20 years, and where are we now? There are just five female bosses of FTSE-100 companies, and three of them are Americans who had held boardroom jobs outside the UK.
We have had endless reports about how to "encourage" women into the boardroom, but still only 16 FTSE-100 companies have a female executive director ? a full-timer involved in the day-to-day running of the business. There is a more liberal sprinkling of non-executives ? that is, part-time independent directors who monitor management and represent shareholders ? but still 18 of the top 100 firms have not a single woman sitting at the boardroom table.
The situation is worse outside the top 100, where the pressure to conform to corporate governance standards is higher. Far worse. In the next largest 250 companies there are just 24 executive directors ? a paltry 4% of the total.
Yesterday the latest "women in the boardroom" report, written by former banker Lord Davies of Abersoch, said FTSE-100 firms should set a target of 25% by 2015. The next 250 should set themselves a relevant target for their industry and, frankly, do their best to meet it. What happens if they don't? A threat of legislation to impose quotas ? which would require yet more reviews. By the time it's likely to become law another generation of female workers will have been passed over.
The fact is that quotas are the only way to force change. For two decades I would have argued against such a move ? but no longer. Almost every senior woman in business disagrees: quotas would devalue women's achievements, and so on and on ? although it is hard, for instance, to detect any sign of guilt among MPs who are in parliament because of women-only shortlists.
The argument against quotas from those women who have clawed their way to the top is always that nothing stopped them from making it to the boardroom. It is not a case of pulling up the drawbridge to stop other women following: they won't lower it, either, for those following behind, and help correct a situation that is clearly wrong. And this is despite the fact that there is plenty of evidence that putting women on boards correlates with better business performance. Headhunters, whose senior ranks are full of women, are equally to blame. Why don't they look beyond the usual suspects, or are they too busy kowtowing to the chairmen paying their fees?
One huge opportunity for change was missed ? by another woman. In 2003 Laura d'Andrea Tyson, an economist and former adviser to Bill Clinton, was asked by corporate governance guru Sir Derek Higgs to compile a list of 100 women who would make good non-executive directors for big firms. After months of procrastination she produced not a single name. It wasn't necessary, she said. All companies had to do was look a bit harder. Needless to say, they didn't.
Davies wants shareholders to monitor firms to ensure progress is made. That's the same shareholders who failed so overtly to hold back the rise in boardroom pay and who were judged by former City minister Paul Myners to be "asleep at the wheel" when they were meant to be monitoring the banks.
There are high-profile backers of quotas ? the World Economic Forum at Davos imposed a quota on its partner firms this year in a bid to get more female movers and shakers to the Davos meeting of business movers and shakers (Naturally, some of the top women there expressed their disdain for the move).
The Norwegian government has imposed a 40% quota on its companies. The move has had its critics, but guess what? Norwegian business has not crumbled. And Christine Lagarde, the French finance minister, also made it clear recently that talking hasn't solved anything and quotas are the only answer. Even the "threat" of quotas in the UK has been having an impact: in recent months, with the Davies report looming, one in three non-executive appointments has been a woman.
Davies has missed his chance to make a step change. Without quotas there is just too big a risk that the next 20 years will be just like the last 20.
Source: http://www.guardian.co.uk/commentisfree/2011/feb/24/women-norway
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