Change needs to be welcomed
In September Grant Thornton published the Women in Business – the power of diversity report. Demonstrating added value that diverse executive boards can create.
The key word here is executive; despite the success of the Women on Boards campaign triggered by the Davies Review, only 47 of the UK’s top 350 listed companies have female executive directors.
The figures in support of diverse boards are startling – whilst a 0.53% increase in return on investment may sound small, the opportunity cost of having all male executive boards is almost 3% of the UK’s GDP. With the UK’s economic growth sluggishly holding at only 0.7%, this report adds pressure to government to start looking much harder at why women on the boards of FTSE companies are predominantly being appointed to non-executive positions. With the number of women in CEO roles in the FTSE100 finally reaching six in December, it is clear that unless organisations take this issue seriously the UK will find itself subject to quotas, a subject currently gaining traction across Europe. The answer is simple, a fair and robust succession plan which does not contain the words ‘not quite ready’ alongside the female names in the list.
This isnt just a gender issue
Ethnicity is another interesting statistic mainly as the traditional and often cited gender barriers such as children and behaviours don’t apply to non-white men. Indeed, the academically over-achieving group, Chinese and South East Asian, do not have a single representative amongst the FTSE100’s executive directors. Green Park’s Leadership 10,000 report in 2015 found that there were only 4 non-white CEOs in the FTSE100, despite 13% of the UK being from a non-white background.
Whilst there are many factors that result in the UK’s top boards not being representative of the general population, it is impossible to reason that white males are simply better at leading companies than any other group. Clearly unconscious bias is a key factor ensuring the pipeline consists predominantly of white males but privilege, combined with social mobility, is also a huge contributor to one’s chances of reaching the top of a FTSE100 company.
Although the board diversity agenda currently remains focused on gender, organisations should be prepared for social mobility and ethnicity to be next on the government’s agenda.
Top tips for success
- Fix the system, not the shortage – focusing programmes on women or minorities (outsider groups) does not change the main issue: the insiders with the power to create change
- Focus on relative achievements in recruitment – an applicant with B grades from a school where the average is D grades shows exceptional performance
- Challenge bias – inclusive leaders recognise their unconscious biases and act to reduce their impact