We don’t need an EU target to place women on boards

November 15, 2012, 00:19am

EU COMMISSIONER Viviane Reding has returned to her proposal for the boards of European companies to be at least 40 per cent female. Her suggestions may have been watered down – 40 per cent is now a target, not a quota – but the initiative still fails to address the real problem.

In the UK, enhancing board room diversity is not the big challenge. Over 40 per cent of the appointments to FTSE 100 boards in the past year were already women, and they now account for 17 per cent of non-executive directors. The real shortfall lies in the proportion of women on executive committees. It is now barely into double figures.

This figure points to a broader issue. Companies won’t address gender imbalance by changing their non-executive directors. Instead, attention needs to be refocused on how to accelerate female progress through the executive ranks.

We recently published a research study that explored this issue. In lower and middle management, 38 per cent of roles are filled by women. But in the same companies, the figure shrinks to 11 per cent on the executive committee.

This doesn’t represent a “glass ceiling”, however. It’s more of a “slippery ladder”. Women do not rise to a certain point and then get stuck. Instead, female attrition is higher at each step of the pipeline.

There are two main causes. Firstly, there are issues of supply, with many women deciding that working norms are incompatible with other demands. They therefore choose to step off the corporate treadmill to pursue alternative options.

Secondly, there are issues of demand, whereby women encounter unconscious bias in evaluation processes or challenges in acquiring the experience necessary for senior roles.

So even if quotas aren’t the answer, there are reasons to implement corporate changes to support the rise of female executives. Success requires three elements.

Firstly, those at the top of large companies must visibly champion the benefits of more diverse senior teams. Secondly, companies need to create opportunities that give women the best possible chance to flourish. This could mean, for example, competing aggressively for the best mid-career female talent or openly advertising the success of high-achieving women. Lastly, women who do succeed should seek to become active role models for the next generation; and companies should work to address any unconscious issues that hold women back.

Getting more women into senior executive roles is not a question of meeting targets to assuage diversity critics. It is about enhancing the quality of management teams in major corporations. If companies are to achieve the best, they have to recruit and retain the best.

Louise Vøttrup and Michael Reyner are partners at MWM Consulting. Cracking the Code: Getting More Women Into Senior Executive Roles can be found at: www.mwmconsulting.com/Executive-Search-Cracking-The-Code.html

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