Development Corporate Governance Uk
development corporate governance uk
The International Centre for Women Leaders at Cranfield Business School recently published its annual ‘Female Board Report’ which charts the number of women directors on the boards of Britain’s largest quoted companies. This shows a further slowdown in what was already a glacial rate of improvement from a very low starting line. Even worse it highlights that most of the female directors of these top companies are non-executive – a mere handful are full time executive directors who have an active management role within the business. This suggests that it is immensely hard for women to rise through the organisation hierarchy to be able to take top jobs and that the shortfall is only slightly improved by companies going outside to recruit token women directors on to their boards. The report recommends that a quota of women directors should be imposed to redress the balance.
Why does this matter? It matters for three reasons.
- nations that have low levels of female participation at the highest levels of commerce, public service and the professions waste an enormous resource. More than half of all British university graduates are women but they only account for 5.5% of the executive directorships of the top 100 UK companies.
- those organisations that fail to take advantage of this human resource are lacking in diversity. Whilst the academic evidence is lacking, there does seem some that indicates that more diverse companies are more innovative. Of course this includes ethnic diversity and age diversity too. The UK Corporate Governance Code recognises this and recommends diversity in the boardroom.
- It is unfair. Half of our society is discriminated against through the ‘rules of the game’ being stacked against them.
Until companies feel able to accept the idea of flexible career paths very few female directors will be appointed to boards on merit. The women that do make it will generally be those who have chosen, or been forced by the constraints of their career, not to have children. Companies expect their senior executives to be there the whole time – it is a rite of passage – they can’t cope with the concept of career breaks nor with flexible hours. Yet often there seems no very good reason why either of these could not be accommodated. In this way they waste the talent of half of the population. But this is not just a gender issue. A similar explanation may lie below racial discrimination, ageism or any other diversity issue. An ethnic minority, for example, may fail to get the educational background or early career of the majority population but this can still be recovered later on if recruiters take a broader view of talent and look more at the capabilities and potential of candidates and less at their experiences. This argues partly for making greater use of candidate assessment centres and capability profiling. A good recent book that takes this aspect of the subject further is “The Value of Talent”
The Sunday Times reported on 12 December 2010 that Lord Davies, who is preparing a report for the UK government on how to remove obstacles to women making it to the board, is considering recommending the imposition of a gender quota for listed companies. This is the wrong way to go. Redressing the narrow-minded approach to recruitment is the way forward, not imposing quotas.
Robert Walker, Chairman of Travis Perkins plc interview at UWE
