Women on the board - choice not law

Written by Mike Beesley | Blog | Posted 26/03/2013

The proposed EU Directive making it mandatory for listed companies to keep 40% of seats on the company board for women has been watered down to only include non-executive roles.

The Institute of Directors concluded last year that, while it shares the concerns regarding the relatively low numbers of women on the boards of UK listed companies, it believes that a further highlighting of gender diversity in the UK Corporate Governance Code would not be justifiable.

Even the UK Minister for Women does not want it. Maria Miller says: “Simply mandating a target or a quota on to a company… is not really getting to the root of the problem, which is making sure we have a pipeline of women coming through our corporate structures to be able to be effective operators at board level.”

And I agree. Despite all the noise and political correctness that surrounds the issue,

I don’t believe the majority of women really want it.

It is suggested that women are paid 10% less than men for doing an equal job . If this is true, it is clearly wrong. To me, this is simple inequality. However, the idea that a woman should be chosen over an equally qualified man to sit as a Director on a Board – non-executive or not – just because she is a woman is also completely wrong.

Whether I am at a board room meeting or having a business dinner, the women I am sitting alongside are not there because of a quota or target. They are there because they are good at what they do.

The challenge with quotas is well demonstrated by the situation in Norway. In 2006 it passed a law requiring 40% of boardroom seats go to women, or men in the rare case of female dominated boards. In an interview in the Guardian earlier this year, one of the country’s most accomplished businesswomen and, at one point, holder of more than 185 Norwegian board seats Mai-Lill Ibsen states that this ‘obligation’ has led to a staggering 40% of business avoid the rule by converting into private limited companies.

Two thirds of them admitted the quota rules were behind their decision to delist from the stock exchange.

A more constructive and beneficial approach appears to be taken by organisations such as the 30% Club, which is a group of chairmen and organisations voluntarily committed to bringing more women onto corporate boards, through choice, encouragement and support, not quotas. Its members range from Waterstone’s Miranda Curtis to Richard Gnodde of Goldman Sachs.

Member David Tyler, Chairman of Sainsbury’s, says: “In my judgment, shareholders benefit when boards have a diversity of skills, background and experience. That’s the way the most effective boards tend to be composed – with both men and women playing a full part.”

I believe the most important thing is that women be given the same opportunities as a man right from the beginning of her life and that the choices thereafter are hers to make. The wider issue of diversity should also be considered – professional background, education, sector experience, nationality, age and personality may all be relevant in the composition of an effective board.

Sue Haswell, Director of Devon-based marketing company Big Results says: “The fact is, if women don’t want to sit on the board, then they won’t! Making it a legal requirement is only going to lead to tokenism. If men feel that women would benefit their board – and I’m sure they would – then surely it’s better to find a way to encourage women to join, rather than creating yet more positive discrimination.

“Obviously more needs to be done to engage women to take directorships . But at the end of the day it should be choice – not law.”

I certainly would not entertain having a member of my board simply because they are not a man – and I don’t believe any of the hard working, exceptional women I know would want to be there for that reason either.

Mike Beesley, CEO, RSG

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