Will boardroom quotas ever be more than a numbers game?

25 Feb

I’ve been curious to watch how the boardroom quotas debate has unfolded. Should boards be forced to appoint women to make up numbers, to appease the feminists – or just because it makes good business sense? I’ve seen all different points of view put forward in the last few days.

Lord Davies of Abersoch has decreed that a third of board appointments in the next four years must be female in order to hit the voluntary target of 25% of women holding board positions by 2015. However, if listed companies do not do this voluntarily, Lord Davies has warned that they may be introduced if firms do not make sufficient progress in the next two years.

In presenting his findings, Lord Davies said: 
“This is not about aiming for a specific figure and is not just about promoting equal opportunities but it is about improving business performance. There is growing evidence to show that diverse boards are better boards, delivering financial out-performance and stock market growth. I have been pleased to see the huge amount of interest that this review has sparked both from individual businesses and industry groups. I hope that the recommendations I am announcing today will mark the beginning of a step-change so that more of our talented women get seats on our top boards.”

I’ve never been in favour of ‘tokenism’, or raising the risk of whispers in the corridor that a woman claimed her seat in the boardroom solely because of her gender. That is insulting and counter-productive. However, something needs to be done to alter the gender balance at the top, where women currently hold just 12.5% of board-level positions.

Lord Davies’ recommendations need to be embodied and brought to life in a meaningful way within an organisation if they’re going to have any effect at all. That means:

  • Recruitment procedures need to be more diverse. So, where, when and how jobs are advertised, and how headhunters draw up their shortlists will need to be revised and widened to ensure they include potential women for the role.
  • Diversity policies have to be drawn up and reported on publicly, and investors should hold companies to account. This is the ‘comply or explain’ approach.
  • Talent management programmes must set out career paths for women, and offer  relevant coaching and mentoring support so that when women are picked for the top spot, they are ready, willing and able.

Without these measures filtering through an organization, I fear these proposals will prompt little more than a numbers game.

 

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