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The trouble with numbers

14 November 2014

Women tend to pull up the ladder, says Anthony Hilton

The drive to get more women on boards has been hailed a success. When Lord Davies first published his report the proportion of women on boards was stuck at 12%. His third annual progress report in March 2013 showed that women now account for 20.7% of board positions. Hitting his target of 25% in 2015 may be closer than seemed likely three years ago.’

In FTSE 250 companies the impact is less marked but still considerable. Here women account for 15% of all board directorships. There are still 48 entirely male boards, but given that women account for 33% of all board appointments it seems only a matter of time before these dwindle away too. The trouble with these numbers is that they relate mainly to women as non-executive directors. In the FTSE 100 women hold more than a quarter of non-executive positions but only 6.9% of the executive roles. In the FTSE 250 one in five of the non-executives are female but women hold only one in 20 executive jobs.

Sir Win Bischoff, former chairman of Lloyds Bank and now chair of the FRC and chair of the 30% Club, a campaigning body, affirmed at a recent meeting that the target now should be to get greater female representation on executive committees.

This is the real issue. In junior management, in the years shortly after recruitment from university, there is no great gender divergence, as indeed there should not be given that women tend to outperform men at undergraduate level. However, the proportions change markedly as the years go by. In one of its extreme manifestations, a recent meeting of the World Economic Forum was 83% male.

There are many reasons put forward for this but it is interesting that even before women have career breaks to have children they tend to be thinning out in the executive ranks. No one knows for sure why this is but there are theories that it is a result of male corporate cultures, where advancement goes to the most brazen, assertive and aggressive, rather than the most talented. It is not without reason that academics claim there are more psychopaths in British boardrooms than there are in the nation’s mental homes but that is another story.

This lack of diversity is bad for business. There are studies that prove diverse teams take better decisions – not simply male and female but those with a mix of race and background too – provided that they listen to each other. The reason is that when a group comprises like-minded individuals they all get stuck in the same place. If women are scoring higher than men at university, then failing to clear the path through to senior management, businesses are failing to tap into half of the available talent – and the more gifted half at that.

There are other issues too which do not get talked about enough. One is that women who do make it through to the higher levels tend to pull up the ladder behind them. Whereas men see it as part of a senior job to mentor and sponsor the advancement of younger executives, females tend not to do so – and if they do they tend not to sponsor women. Evidence for this is anecdotal but it is talked about in private.

Another challenge was told to me by a woman who had senior jobs in a series of high profile businesses. She was blunt about why so few women stuck it out till they got to the top. She said unlike men women have a choice – they do not feel they have to do it. So when they get to the higher levels of management and see how badly men behave towards each other and to their subordinates, many women decide they want no part of it. Her thesis is that men feel obliged by convention to continue to fight for advancement. It is still acceptable however for women to opt out to find a more balanced way to earn a living. What this means is that female advancement in the executive ranks is not just a matter of mentoring, encouragement or talent spotting. It will require a complete change of culture. It is an open question as to how many companies are really prepared to attempt that.

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