Five ways to improve gender balance in boardrooms without using quotas

Frances Dickens on why meaningful changes in firms are better than new laws

Quota is quickly becoming my least favourite word. From EU fishing policy to the number of women on boards, there’s something so bureaucratic and unyielding about the concept, which is why recent calls by leading City of London women, including former Lord Mayor Fiona Woolf, for the introduction of boardroom quotas for women, fill me with gloom.

News that the UK’s largest companies  risk missing Lord Davies’ voluntary end of the year 25% target for increasing the number of women on boards is not encouraging. But ladies, gents, there are more creative options than a fall-back on quotas, with all the associated imagery of mandatory box-ticking over merit. Here are five suggestions for how the business community can tackle gender diversity in boardrooms without using quotas:

1. Shout about the benefits of boardroom diversity

From McKinsey to Credit Suisse, reports show companies with women on their boards perform better than those without. McKinsey found that companies with gender-balanced executive boardrooms are 56% more profitable than all-male boards; while Credit Suisse research revealed large-cap companies with women on their boards have higher average returns on equity and better average growth than those without. The business case for better gender diversity on boards is unanswerable. (The same is true for ethnic diversity, another area where big companies are at fault.)

2. Champion and share best practice but name and shame the laggards

While collectively big companies aren’t doing enough to champion gender diversity, individual businesses and whole sectors are taking the issue very seriously. Companies with effective gender diversity programmes or those which are highlighted in reports such as The Times Top 50 Employers for Women should be prepared to share their policies and learnings. Conversely, companies that come across as unacceptably slow in embracing boardroom diversity should be left with nowhere to hide – mining company Glencore, the last remaining FTSE 100 company to appoint a women to its board, which faced massive pressure from politicians, shareholders and the media to mend its ways, is a good case in point.

3. Show support for the 30% Club

This influential group of business leaders is committed to achieving 30% representation of women on boards by the end of this year – without the use of quotas. This is a higher target than the 25% set by the Davies Review demonstrating that there is a real appetite for change. Beyond women on boards, the club is committed to better gender balance at all levels of organisations and to improving the pipeline of young female talent from “schoolroom to boardroom”, with a global approach. With membership including the likes of Charles Dunstone at Carphone Warehouse, Ana Botín at Santander and Charlie Mayfield at John Lewis, this group is not likely to be easily dissuaded from meeting its objectives.

4. Encourage female membership of networking groups

Best practice case studies in this area show that networking groups and forums within organisations are good ways of encouraging women to develop their skills and support each other. I firmly believe networking groups that include women and support men in discussing the talent pipeline within their organisations and the need to ensure diversity at senior levels represent a good solution to overcoming gender balance issues in the boardroom. Otherwise there is a risk both of perpetuating the gender divide that exists at senior levels in many big organisations and of simply replicating the old boy networks, which are arguably at the heart of the problem, with all female ones.

5. Don’t expect change to happen overnight

Of course change in the area of boardroom diversity is happening much more slowly than it should do. And I sympathise with women working in very male-dominated cultures who feel meaningful gender diversity is an impossible dream.The facts remain that we are making progress:  The latest figures suggest that women now occupy 23% of boardroom positions on the UK’s largest companies compared to 12.5% in 2011. Yes we must push hard to make sure the 25% target and preferably the 30% target is met by the end of this year. Compared to where we were four years ago, the momentum behind voluntary boardroom diversity is real and so much more meaningful than quotas imposed by law. Let’s not give up now.

Frances Dickens is the founder and CEO of Astus Group

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