Take two people: one a successful female businesswoman and one a male Tory MP.
Then take two public statements: one calling female Cabinet members “an ugly bunch” and “I could not look at them”; the other calling for companies to be better at ending the male dominance of the boardroom.
Who do you think would have said which…?
As you may have guessed from the fact that I’ve asked the question… it was the male Tory MP (David Cameron) echoing previous calls from the likes of Vince Cable and Lynne Featherstone for changes in company boardrooms, and it was Mary Portas saying such delightful things about successful female politicians.
In related news today, the Financial Reporting Council announced changes in the way firms report on their activities:
The Financial Reporting Council (FRC) today announces its decision to amend the UK Corporate Governance Code to strengthen the principle on boardroom diversity which was first introduced into the Code in June 2010.
The amendments the FRC is announcing today will require listed companies to report annually on their boardroom diversity policy, including gender, and on any measurable objectives that the board has set for implementing the policy and the progress it had made in achieving the objectives. The FRC will also update the Code to include the diversity of the board, including gender, as one of the factors to be considered when evaluating its effectiveness.
The current revised Code, which came into effect in June 2010, included for the first time a principle recognising the value of diversity in the boardroom, which states that, “The search for board candidates should be conducted, and appointments made, on merit, against objective criteria and will due regard for the benefits of diversity on the board, including gender”…
Baroness Hogg, Chairman of the Financial Reporting Council, said: “The changes we made to the Code last year reflected the FRC’s view that gender diversity strengthens board effectiveness by reducing the risk of “groupthink”, making fuller use of the talent pool and keeping companies in touch with their customers. The changes we are announcing today, which were strongly supported in our consultation, will reinforce the Code’s principles by requiring companies to report on measurable objectives and progress in this important area.”
It’s worth emphasising the points in Baroness Hogg’s quote as they’re often missed in more populist reporting of this issue: these sorts of moves are not only widely supported within industry, but one of the reasons they are widely supported is the growing range of evidence that more diverse boards make for better run companies.
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5 Comments
Why can’t we just have the best person doing whatever, no matter colour, gender, sexuality, disabled status, nationality…
I always think that, if I were sick I wouldn’t care who was looking after me, as long as they were the best. I’d hate to be lying there and get the token woman, or gay, or minority ethnic, or whatever… and then die to satisfy some stupid quota.
Tris: the concern is that discrimination, whether conscious or unconscious, means we aren’t actually getting “the best” in the boardroom or in parliament, just more people who are similar to those already in power.
Unconscious bias is everywhere, and an example is the way that female politicians are criticised far more for their looks than male ones, and usually ahead of criticising them for their policies.
“FRC’s view that gender diversity strengthens board effectiveness by reducing the risk of “groupthink”, making fuller use of the talent pool and keeping companies in touch with their customers.”
Similar sorts of things were said about increasing the number of women in Parliament – that it would improve debate, things would be less hostile and confrontational etc. I can’t say I’ve noticed since 1997. Groupthink doesn’t disappear if you have people with the same attitudes of backgrounds just of different genders.
That’s not to say there isn’t a point here – or that it needs addressing. But I think to suggest that things will somehow be magically better if there are more women on company boards is very optimistic.
Tris: aside from the point that Rachel makes, there’s also the issue that what a Board needs to be is the best team to run a company and good teams aren’t just about the individuals, they are also about whether the individuals collectively provide a good team with the right range of skills, knowledge and so on.
If you look at the research I’ve linked through to, one consistent finding is that homogeneous boards are less good at running companies that diverse boards because they don’t have the sort of mix and balance that makes for an effective team.
Hywel: You’re right it is wrong to oversell potential benefits, but in this case there is good evidence from comparing diverse with non-diverse boards – and in the case of Parliament, I think it is arguable some of the claimed benefits have started to appear. (Some though not all – hence the caution against overselling.)
Mark, does everything Lib Dems say nowadays have to include an jibe at the Tories? (even if in jest). The misogynist and racist Tory MP stereotype is getting a bit stale.