Caroline Watson, Co-founder of Progressive Women, writes about the benefits of more women on boards, and new developments supporting women in business.
There has been a lot in the media over the last couple of weeks about women in business and equality in the boardroom. There are new proposals coming out of Brussels that could lead to companies being fined if they fail to meet a target for women to make up 40% of board members by 2020. As the proposal stands this would apply to companies with a turnover of £40 million or at least 250 employees.
Currently across Europe only 13.7% of board members are women. 17.2% of FTSE 100 companies board members are female. It’s startlingly obvious what this means for equality but what does this mean for business?
There are some strong economic arguments for increasing women’s representation on boards. You only had to watch Hilary Devey’s tv programme last night ‘Women at the Top’ to know that there is a convincing business case. Half of UK graduates are women, approximately half the work force are women. It is ineffcient for business to recruit from only half a country’s talent pool, so by not considering women for the top jobs there is a lot of talent being wasted.
‘Women at the Top’ referred to the ‘female brain drain’, the talent that is lost as women leave the workforce, or stop striving for the best jobs in business. Top executives including Stuart Rose formerly of M&S were interviewed about the benefits women bring to leadership roles and how gender diversity in the board room can bring more balanced descisions, as women bring a different perspective.
Proctor and Gamble have reached 50/50 men and women at every level in their organisation after making changes to end the exodus of women. Measures included offering flexi working and reduced work schedules to accomodate work/family balance. Proctor and Gamble concluded the investment in retaining women was worth it, as gender balanced teams worked 5% more efficiently. Obviously, large companies have the luxury of resource to make this investment. Smaller companies may not, and often feel threatened by women of child bearing age, incase they have to pay out for maternity cover. 92% of maternity pay is covered by the government for small businesses. However, there are costs associated with recruiting cover and training. Perhaps some way to end the discrimination women may face at interview is for more men to take their alloted paternity leave. However, this wouldn’t address the challenge faced by small businesses. A way to deal with this could be more goverment support to cover the additional costs faced by companies.
Norway has a quota system for women on boards. It has been implemented successfully and Norway now has the largest proportion of women on boards in Europe at 42%. According to Forbes.com’s Kate Taylor ‘Women at the top allow greater representation and draw from women in the workforce and better outcomes for companies.’ She also explains that data analysed by Catalyst reveals between 2004 and 2008 the top quartile of companies with the highest percentage of women directors outperformed companies in the quartile with the lowest by 26% in the US.
It’s controversial as to whether quotas are the right action. But what is clear is that more women at the top is good not just for equality but also for business. That’s why Progressive Women are so excited to see the forthcoming launch of a new organisation Women on Boards. They’re hosting a number of launch events in cities across the UK including Bristol, Edinburgh, Manchester and Birmingham. You can find out more about the organisation and how you can attend their launch events on their website here. I’ll be at the launch in London later this month and look forward to working with Women on Boards to see more women bringing benefit to business.
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