Tag Archives: gender diversity

Women on the board are good for business

5 Aug

Companies with at least one woman on their boards outperform those with no women at the top table. That’s according to a study by the Credit Suisse Research Institute.

womaneer women on the board

Having women on the board improves company performance by 26%. (pic: istockphoto.com/AlexanderImage)

Its report Gender Diversity and Corporate Performance analysed the performance of 2,400 companies with and without female board directors over six years. Its main conclusion during that period is that companies with at least one woman on the board outperform companies with no women on the board by 26% – and they perform better when markets are falling.

Why is this? The report identifies six reasons why gender diversity is good for business:

  1. It’s a sign of a better company, and is a signal that the business is already doing well.
  2. A diverse board makes all members of the board put in a better performance.
  3. It gives a better balance of leadership skills, because women are generally good at mentoring and coaching.
  4. It gives access to a wider talent pool.
  5. It’s a better reflection of the consumer decision maker.
  6. More women improve corporate governance.

The report concludes: “The debate around the topic has shifted from an issue of fairness and equality to a question of superior performance. If gender diversity on the board implies a greater probability of corporate success then it would make sense to pursue such an objective regardless of any government directive.”

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Investor action group to press for more women on boards

16 Nov

The 30% Club has set up an investor action group to help ensure companies are doing more to improve boardroom diversity.

The group – which includes major institutional investors Aviva Investors, The Co-operative Asset Management, F&C Investments, Jupiter Asset Management, Legal & General Investment Management, Newton Investment Management and Railpen – will push the business case for having more women on boards with chairmen and management teams who decide senior appointments.

This move marks the first anniversary of the 30% Club, which was set up to improve gender diversity in British boardrooms, setting itself a target of 30% female representation on FTSE 100 boards by 2015. Currently that figures stands at 14.6%.

Helena Morrissey, founder of the 30% Club and CEO of Newton Investment Management, said: “As we look forward to 2012, we should continue to challenge companies whose boards remain too male dominated and ‘identikit’. Only by holding these firms to account will we see the changes we have set out to achieve. This is one of the primary functions of our newly launched investor group, and we look forward to working with members of this group to tackle these boards and encourage change at the very heart of the issue.”

IoD to launch directory of potential female directors

11 Nov

The male head of the Institute of Directors (IoD) has pledged to take a leading role in promoting and achieving boardroom diversity.

Speaking at the IoD’s Women as Leaders conference, director general Simon Walker said one of his core objectives was advancing the cause of female business leaders.

He said: “There is no doubt that role of a director has been seen in the past as a job for the boys. This image is changing, but it has not yet been entirely dispelled. The notion that women should not play an equal role with men in the boardroom is not only unjust, but – equally importantly – inconsistent with the efficient functioning of a modern economy. I am absolutely convinced that the IoD must assume a position of leadership in advancing the cause of diversity on boards and in other leadership positions.”

His three-point plan for supporting board diversity involves:

  1. The first IoD training course for female directors: Women as Highly Effective Directors.
  2. Requiring companies to report on boardroom diversity in their annual reports, on a comply or explain basis.
  3. Establishing a directory of potential female directors that could help headhunters and companies add female non-executive directors to their boards.

The IoD blog has helpfully summarised some of the key insights from the Women as Leaders Conference 2011. The point that stands out for me comes from ICAEW’s director of member services Sharron Gunn, who is quoted as saying that it’s not about women on the board today, but about how we manage the pipeline of women coming forward to fill senior roles.

Headhunters frequently bemoan the fact that there just aren’t enough women around at senior levels. The work needs to start earlier, with women being mentored and groomed for the top. For now, that pipeline is generally leaky and unsupportive.

Look to the US for lessons on boardroom diversity

28 Oct

As the UK struggles to find enough women to fill boardroom roles, and with progress since the publication of Lord Davies’ report still slow, there are certainly lessons to be learned from the US, where more women than ever are leading Fortune 500 companies.

IT giant IBM has this week appointed its first ever female CEO, Virginia ‘Ginni’ Rometty; pharmaceutical firm Mylan named Heather Bresch as its CEO; and last month Hewlett-Packard announced Meg Whitman as its CEO.

There are now 18 women running Fortune 500 companies, which is still a tiny percentage (3%) but at least it’s moving in the right direction. The lessons the UK can learn are summed up in this excellent article in USA Today, which says that change has to come from companies and from women themselves.

In summary, progress for women doesn’t depend just on more female CEOs being appointed but for businesses to set diversity targets, measure them and report on them. Women have to seek out mentors and sponsors, and be stronger and more expectant at the salary negotiating table.

However, the quote that stands out for me comes from IBM’s new CEO Rometty, again in the USA Today article, where she says women have to change their mindset and stop hesitating when offered the chance of a big job. She said: “You have to be very confident, even though you are so self-critical inside.”

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