Business, Innovation and Skills CommitteeWritten evidence submitted by Hy Consulting Ltd and Associates
(Prepared by Hy Consulting Ltd, Jane Bowles and Ian Birrell, assisted by Hy Associates, Caroline Turner and Coline Covington)
Question 4—How should the gender stereotyping prevalent in particular occupations, for example in engineering, banking, construction and the beauty industry be tackled?
1. We are now seeing more and more women with higher education. In the UK 56.4% of university graduates are women. Nevertheless, in 2011, women were only 14.7% of graduates in engineering from UK universities. (Source HESA)
2. The problem of gender typing starts in the education system that feeds into the workforce ie, what girls and boys are encouraged to study. It is important to note the much higher proportion of girls taking science subjects in single-sex secondary schools when compared with mixed schools.
3. Gender stereotyping within occupations appears most effectively tackled through a structured Diversity and Inclusion policy and strategy, across the Organisation, which top management is seen to be “leading” (ie, walking the talk), and which is implemented at all levels throughout the business, in the same way as any other part of the business strategy (eg, DI goals in the same way as there are financial goals, marketing/sales goals, and so on). Learning and development initiatives for management at all levels are essential for this change in company culture to be successful.
4. Change throughout talent management processes is clearly essential, in order to broaden the talent pool and increase the diversity in the mix. Processes and procedures, at all stages, must be proofed to identify and remove unconscious bias and barriers (unintended) to entry for certain genders to certain occupations (ie. barriers faced by men in the beauty business, to women in engineering). In practice, this might mean changing the questions asked when it comes to recruiting and actively seeking to include gender diverse lists of candidates for all jobs, for higher level posts, working with Executive Search companies that have signed up to the voluntary code of conduct; for entry or lower level posts, targeting universities with a better gender mix of undergraduates.
5. Active approaches taken by some companies appear to be bearing fruit, such as targeting graduates at careers events and holding “open days” to invite women qualified in science or engineering to visit the company (vice versa for male graduates in female-dominated occupations), as well as “fixing up” the company image through roles models that promote new images of success in the organisation (ie that do not simply perpetuate the image that men lead in engineering, women in beauty).
6. Role models lack of women in top positions in male-dominated sectors (such as engineering and construction), and vice versa for men in female-dominated sectors, are lacking. There is clearly a need for young people to be exposed to many more examples of success of women and men in professions/occupations which are dominated by the other gender. This would go back to the context of primary and secondary education, where it appears that gender stereotypes are still promoted (probably unintentionally).
7. The nature of work itself is changing radically and this is not reflected in the Select Committee’s questions. Talented and ambitious young men and women are being drawn increasingly into the burgeoning field of advanced technology, internet entrepreneurship, and law relating to technology. The traditional corporate work structure, including the focus on “presentism”—being expected to be physically located in the workplace, at specific hours of the day, in order to get the job done—is not suited to these new fields and we may well be looking at a dying elephant over the next 20 years. One striking example is Yahoo’s new CEO, Marissa Mayer, who is encouraging innovation throughout the organisation by tackling its culture, specifically by empowering employees and reducing corporate gridlock. A more collaborative, less hierarchical structure signify different values and affect the way both women and men work and the work/life balance.
8. A more fruitful way of approaching the question of stereotyping male/female work might be to use as a context the future of work, which occupations are developing and how we ensure that we attract, develop and tap into the widest talent pool—male and female—that is out there.
Question 6—To what extent have the recommendations in Lord Mervyn Davies’ Report “Women on Board” (published in February 2011) been acted upon?
1. According to the Dept for Business, Innovation and Skills, since Lord Davies’ review and subsequent report, the number of women appointed to the boards of the UK’s top companies has reached unprecedented levels, with women now making up 16.7% of FTSE 100, and 10.9% of FTSE 250 boards, up from 12.5% and 7.8% respectively in 2010.
2. Since March 2012 women have made up 44% of newly appointed FTSE 100 board directors and 40% of those in the FTSE 250. The Executive Search Firms Code of Conduct, which requires 30% female long-lists and encourages firms to expand their traditional search avenues, has been welcomed by Executive Search Firms, Chairs and Candidates. (Source: BIS—women on boards: code of conduct one year on 24/07/2012).
3. The Female FTSE Board report 2012 produced by the Cranfield School of Management International Centre for Women Leaders, states: “following the publication of the Davies Report in February 2011, in 2012 there are now 20 female executive directorships and 143 female non-executive directorships” among FTSE 100 companies.
4. Overall the percentage of board directors who are female is 15%, an uplift of 2.5% on what was a three year plateau.
5. The number of companies with no women on the board has dropped to 11 and the number of companies with more than one woman on the board has increased to 50.
6. In the 12 months preceding January 2012, the percentage of new appointments going to women was almost 25%, which does fall short of the Davies target of 33%.
7. In the year to January 2012, 47 new appointments were taken by women—almost on the Davies target of 50 and shows a marked change of behaviour in the appointment process.
8. Of the FTSE 250 companies, 135 (54%) now have women in their boardrooms, finally making those all male boards a minority.
9. This figure of 135 has increased from 119, but interestingly the number of companies with two female directors has also increased substantially from 25 to 40.
10. This indicates that the overall percentage increase of women on FTSE 250 boards has come equally from companies placing their first and also their second woman on the board.
11. There are now 10 female CEOs and seven finance directors on the FTSE 250 boards. (Source: “The Female FTSE Board Report, Milestone or Millstone? 2012”, by Dr Ruth Sealy and Professor Sue Vinnicombe, Cranfield International Centre for Women Leaders).
12. In top place of this year’s ranking is Diageo with four women, comprising 44.4%.
13. In second place is Burberry, with three women out of eight directors; one of only three FTSE100 companies that have two female executive directors (EDs).
14. In third place is Pearson, who have also had two female EDs for a number of years and have recently added a second female NED, taking their total number of women to four (33.3%).
15. Morrison, Whitbread and AstraZeneca all continue to do well with 29%, 27% and 27% respectively.
16. Intercontinental Hotels have added a female ED and head a further group of nine companies who have already achieved the target of 25% set by Lord Davies.
17. The Cranfield Report 2012 cites the following companies as working through Diversity and Inclusion strategies to achieve more women in senior posts; Rolls Royce, RBS, Sage, BAE and Vodafone.
Question 7—To what extent should investors take into account the percentage of women on boards, when considering company reporting and appointments to the board?
A more appropriate question would seem to be, “what is the rationale for not taking into account the percentage of women on boards, when reporting and making appointments”?
1. According to the Home Office, women account for around 50% of the working population and according to BIS some 70% of all consumer purchases.
2. Decision making in companies should reflect their workforce and their market: since businesses need to know, understand and respond effectively to the needs of their customers; senior management and decision making structures should reflect their customer base.
3. This market imperative and the strong case for diversity presented in our response to Question 8 (following) both point to the crucial importance of investors taking into account the percentage of women on boards, in reporting and appointing. Investors should be looking at Executive Directorships, which play a major role in running and decision making in business, not only NEDs.
Question 8—Why are there still so few women in senior positions on boards, and what are the benefits of having a greater number?
Two “bodies” of reasons are usually cited:
Organisational Culture—including the issue of family-friendly business culture.
Behaviours—how women feel, approaches and values of women in business.
1. Against the background of global financial and business leadership crises in recent years, which many analysts now feel are at least partly due to the “groupthink” of having too many people (men) who are like-minded in approach and thinking at the top, as well as a plethora of research in recent years (such as McKinsey “Women Matter”, Catalyst, Deutsche Bank, Credit Suisse Research Institute—recently reported that shares of major companies with women on their boards outperformed comparable businesses with all-male boards by 26% worldwide over a six year period). This demonstrates the bottom-line benefits that accrue to businesses with more gender balance at the top. Many businesses and governments are taking measures to ensure a diversity of skills and experiences are brought into business leadership.
2. Part of this has been greater recognition that women often have something different to offer to leadership styles and behaviours (eg in working more inclusively and collaboratively and assessing risk differently). Figures aside, research suggests that female leader behaviours tend to be characterised by inclusive and collaborative decision-making processes, and “listening” cultures that engage input of diverse experiences, views and perspectives. These characteristics are pointed to by 70% of corporate leaders (according to a Deutsche Bank study) as crucial to effective leadership in the 21st century yet lacking their current leadership.
3. The indication is that if corporations recruit and promote more women at a senior executive level, they will add value to the corporation, not only in terms of business performance but also in terms of motivation and engagement of people at work (which in turn contributes to better performance). However, the fundamental values that prevail within much of the corporate sector continue to support a male hegemony—ie, organisational cultures that tend to identify men, rather than women—with the type of behaviours they expect of leaders (ie Command and control approach vs. inclusive and collaborative, which is the way many women in business tend to lead); and men tend to choose their own kind in promotions and selection of people for senior executive and board posts, perpetuating groupthink and lack of diversity at the top.
4. Women on the way to the top often find themselves caught between two stools: ie, criticised as aggressive if they are too “masculine” in their leader behaviour, and criticised as un-leader-like if they are to people-centre, open and collaborative in their approach. Research indicates that this is one of the reasons why some women are “opting out”; they feel that male values around leadership style and behaviours do not represent them and that they would have to compromise their authenticity in order to be credible as leaders. Thus, women may be “choosing” to leave more than feeling “forced” to leave due to lack of opportunity and bias. Either way, the leaking pipeline continues….
5. Thus women’s route to the top in business often comes up against obstacles due to behaviours in corporate leadership, which are usually the result of “unconscious” bias and tend to have impact in all HR processes—from recruitment through promotion and talent management more broadly.
6. Lack of attention to family-friendly policies and practices in the workplace often compound the “difficulties” for women, who usually bear the brunt of organising care for dependents—which in itself perpetuates perceptions and assumptions that women with caring responsibilities will not “put the job first” sufficiently to do what it takes in senior posts. There are a number of women between the age of 27–35 years leaving the workplace. One of the factors contributing to this is the cost of childcare in the UK. The Organisation for Economic Co-Operation & Development show that the UK has the most expensive childcare in the world—the average cost of £97 per week for 25 hours, rising to an average of £115 a week in London and the South-East.
7. Some women decide they don’t like what they see “at the top” in terms of values and behaviours, and they don’t feel like navigating the maze of office politics and “doing the right thing” by the standards of those men at the top. So they move out rather than move up. Hence the oft cited phenomenon of the “leaking pipeline”.
8. On the other hand, women tend to be less “visible” in promoting their own achievements, more altruistic in seeking recognition (ie, for their team rather than for themselves individually), sometimes cut off from the informal male-dominated, out of work “clubs” and networks where promotion conversations and decisions take place.
9. In summary, while there is now a great deal of evidence that having more women on boards and in senior management positively affects board performance , business culture, productivity and profits—is this too the right question?
10. Should we be asking about board and leadership culture in business—questioning values and approaches of male-dominated organisation cultures? Many women do not want to be on boards (or in top executive positions) because what they see in terms of values and behaviours does not sit well with them; other goals may be more important to them. In this context, it is hardly surprising that women are under-represented in senior positions on boards. Should we be focusing instead on:
what makes corporate culture successful and how is this determined?
developing policies and strategies to get more women on boards as a means of bringing in what are considered more “feminine” values (or “female leader behaviours”)?
It is important to note that many successful men are also beginning to opt out of being on boards for similar reasons.
Question 9—How successful is the voluntary code of conduct (a recommendation of the Davies Report) which addresses gender diversity and best practice, covering relevant search criteria and processes relating to FTSE board level appointments?
1. In terms of recruitment processes and board appointments, the voluntary code of conduct for executive search firms, developed in July 2011 by leading members of the industry in direct response to Lord Davies’ review into “Women on Boards”, sets out seven key principles of best practice for executive search firms to abide by throughout the recruitment process.
2. According to the Dept of BIS, “over the last year Executive Search Firms have seen a continued culture shift amongst their clients, who are increasingly open to considering a wider range of female candidates and are placing a strong priority on appointing qualified women”.
3. To date 34 leading Executive Search Firms have signed up to the Code.
(Source: http://www.parliament.uk/business/committees/committees-a-z/commons-select/business-innovation-and-skills/inquiries/women-in-the-workplace/)
4. Against the background of increasing “noise” around requirements for companies to “comply or explain”, set targets or even quotas, around issues of gender balance on Boards and in Senior management. A growing number of companies are apparently sourcing the services of Search firms able to offer them with gender diverse talent pools.
12 October 2012