Women taking their place at the top table

Anne Richards
Anne Richards
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An increasing number of women are taking seats on the boards of stock market-listed companies, but there’s still room for improvement, as Clare Baillie finds out

IF YOU were asked to imagine a board of directors then what picture would pop into your head? Would it be a group of grey-haired men in even greyer suits sitting around a massive wooden table and reminiscing about their time together at university or private school?

The 30% Club is out to change that stereotype. The organisation, which was founded in November 2010, wants to see a minimum of 30 per cent of the seats on boards of directors occupied by women because its members believe that more diverse leadership and governance brings about improved performance for both companies and their shareholders.

Yet the club doesn’t believe in mandatory quotas. Instead, the body is made up of chief executives and chairs who think that a voluntary approach will be more sustainable, with women recognised for their talents and not simply for allowing a company to complete a tick-box exercise.

Wind the clock back to 2004 and it’s easy to see why the 30% Club was created. Then, only 9.4 per cent of the directors sitting on the boards of the companies that formed the Financial Times Stock Exchange (FTSE) 100 index were women and a report by the Equality & Human Rights Commission in 2008 estimated that it would take 70 years to reach gender equality.

Action clearly needed to be taken. Following the 2010 General Election, the Conservative and Liberal Democrat coalition invited Lord Davies of Abersoch – who as Mervyn Davies was chair of London-listed banking giant Standard Chartered before going to the Lords in 2009 and serving as a minister in Gordon Brown’s Labour government – to launch a review into the subject.

Davies began work in September 2010 and his report in February 2011 made for sober reading.

The percentage of women on the boards of FTSE100 companies had crept up to 12.5 per cent, but Davies knew more effort was needed and so he laid out a series of ten recommendations.

Instead of insisting on a quota system, Davies opted to encourage chief executives and chairs to disclose how many women sat on their boards and held senior management positions within their companies and set a target of having 25 per cent female representation on FTSE100 boards by 2015, with his recommendations being welcomed by groups including the 30% Club.

Fast-forward to last October [2015] and Davies’s final annual review following his report showed how the situation had changed.

An addition 550 women were appointed to UK boards between 2011 and 2015, according to the review, with the percentage of women on FTSE 100 boards reaching 26 per cent, exceeding Davies’s 25 per cent aim.

This prompted him to recommend that the target be increased to 33 per cent by 2020 and extended to cover all of the companies that constitute the wider FTSE 350 index.

At the very top of the pyramid, the very largest companies have already breached the 30 per cent barrier.

“The initial aspiration of getting a minimum of 30 per cent has been met for the largest companies and now 30 per cent of directors are female,” says Anne Richards, chief investment officer at Aberdeen Asset Management, who is about to become chief executive of Prudential’s M&G Investments arm and who sits on the steering committee of the 30% Club.

“The challenge thereafter is how do we take that from the larger companies into the medium-sized and smaller companies and also into the privately-owned companies as well as the public-listed world. By shining a light on the issue and helping people to realise what the impediments are and what the advantages are of moving towards a better gender balance, I think this campaign has been incredibly successful.

“One should never underestimate the extent to which there is a degree of inertia towards the status quo in any situation. What was important about Lord Davies and the government shining a light on the situation was that it sped up the process.

“We need a lot of champions – and male champions as well as female champions – who understand the real and concrete business advantage in having a variety of different voices around the table.

“It’s not because women have any secrets or are necessarily better or worse in specific areas, it’s because gender diversity is a good indication of greater cognitive diversity around the table – you’re likely to get a better mix of views around the table if people haven’t all walked the same path, gone to the same school, gone to the same university or shared the same locker room.

“Having these champions has moved the debate on from being simply one of social justice – which I still believe is important – to one about competitive advantage.”

Research by the New Financial think tank showed that the UK is also slightly ahead of its fellow European markets when it comes the number of women in the boardroom.

Across Europe as a whole, 23 per cent of directors are women – compared with the UK’s 25 per cent – although the European figure has risen by three percentage points during the past year, showing that progress is being made.

Away from the publicly-listed companies on the stock market, progress is also being made among privately-owned businesses.

At MacRoberts, the Glasgow-based commercial law firm that traces its roots back to 1861, 28 per cent of the partners are women, along with 71 per cent of the fee-earners.

“In the past, the lack of women on boards may have been seen as a cultural problem, but now it’s not so much about culture but about the opportunities not being there because they depend on skillsets,” explains Katy Wedderburn, who has been with MacRoberts for 15 years and is an elected member of the firm’s management board.

“Increasingly now, we do see opportunities there – we see women who have come through the ranks and are ready to take seats on boards.

“There are opportunities there now for women. I’ve never felt at a disadvantage because I’m a woman.

“But there’s still change that needs to happen in both the public and private sectors to make sure those opportunities are there.”

On 4 January, Maureen Kinsler was appointed as international chair of patent attorney firm Marks & Clerk. “Although I have not come across it myself, many people perceive that there is a glass ceiling,” says Kinsler, who is based in the firm’s Edinburgh office.

“In my industry at least, once we have people at a certain level, no matter what their gender, they become so valuable to the business that there is no barrier to progression. It is important that no-one comes into the workplace expecting to be discriminated against. Expectations can be very decisive in how far people go,” Kinsler adds.

“Significant progress has already been made. It takes time, normally decades, to train and develop people to the point where they are ready to operate at board-level. With continued investment in women from entry level all the way through their careers, we should see a continued increase in representation.”

Progress in public sector

FIRST Minister Nicola Sturgeon used a speech in November to commit the Scottish Government to gender balance on public sector boards by 2020.

Sturgeon saluted arts agency Creative Scotland and waterways operator Scottish Canals for having already achieved the goal.

She said that the “vast majority” of public sector bodies had also signed up to the target.

“I firmly believe that we should embed the commitment to a more diverse and gender balanced board membership,” she added.

“So following the passage of the Scotland Bill, I can confirm that if re-elected the Scottish National Party will consult and bring forward legislation on gender balance in public sector boards in the first year of the next parliament.

“Scotland is potentially at a tipping point in relation to gender equality. Social attitudes have progressed significantly here, as they are doing in many countries around the world.

“We currently have a Scottish Parliament where the presiding officer and the leaders of the three largest parties are all female. We also have a gender balanced cabinet.”

On 1 December, VisitScotland announced the appointment of four women – Anne Anderson, Rebecca Brooks, Cathy Craig and Carolyn Jameson – to its board, bringing gender balance to the tourism agency.

SCOTTISH FTSE100 COMPANIES

Aberdeen Asset Management

Anne Richards, chief investment officer

Julie Chakraverty, non-executive director

Jutta af Rosenborg, non-executive director

Val Rahmani, non-executive director

Royal Bank of Scotland

Aileen Taylor, chief governance officer and board counsel

Alison Davis, non-executive director

Penny Hughes, non-executive director Baroness Noakes, non-executive director

SSE

Katie Bickerstaffe, non-executive director Sue Bruce, non-executive director

Standard Life

Melanie Gee, non-executive director

Noel Harwerth, non-executive director Isabel Hudson, non-executive director Lynne Peacock, non-executive director

This article appears in the Spring 2016 edition of Vision Scotland. An online version can be read here. Further information about Vision Scotland here.