by Eva Tutchell and John Edmonds; 19 November 2013
Men hold most of the positions of power in British industry. That is common knowledge but the full extent of male dominance is sometimes obscured by a cunning use of percentages.
We are told that the number of women on FTSE100 boards has gone up by 10% in the last three years. And so it has, but men still outnumber women on the boards of FTSE100 companies by about six to one.
There is also the, entirely innocent (of course), tendency to just talk about Non-Executive directors. Switch the focus to Executive directors, who hold the real power, and the gender ratios are far worse. In FTSE350 companies the most powerful jobs are normally the chief executive and the finance director. That adds up to 700 very powerful jobs. How many of those 700 jobs are held by women? We counted and the number is 31.
To put it another way, 95% of the most powerful jobs in British business are held by men.
Some men blithely brush the figures aside and talk, rather rapidly in most cases, about jobs being awarded on merit and men just happen to get them.
The merit argument should be handled with due respect for the evidence. Girls routinely outperform boys at primary and secondary school and well over half this county’s university degrees are awarded to women.
Many women rarely get an opportunity to show their ability. Only a tiny number of Director’s jobs are advertised and very few positions are filled after a formal system of interview.
So men informally recommend other men and most women who might be interested do not even know a vacancy exists until it has been filled.
Increasingly, enlightened men as well as women look at the facts and accept that the present gender imbalance is unfair. In reality the case for change is beyond reasoned argument and the right question is not whether unfairness exists but how such obvious unfairness can be corrected.
During our research we found a plethora of solutions across the world. The American approach is the most aggressive. Drawing many lessons from the civil rights movement, American women argue that every example of discrimination should be challenged in the courts and in the media. The approach requires constant vigilance, enormous energy and the willingness of some heroic women to sacrifice their own careers as they challenge the masculinity of corporate America.
American women have been waging a noble and inspiring campaign. They deserve great admiration. Unfortunately the facts show that their campaign is not working. Corporate America can employ good lawyers and expert PRs to challenge and deflect the criticism. The US figures for women in the executive suite or in the corner office are no better than the figures for the UK.
As people would expect, the UK approach is less heroic and less challenging. The Coalition Government appointed Lord Mervyn Davies to find a solution and he has recommended a slow and steady incremental approach. He wants the boards of FTSE100 companies to contain 25% women by 2015.
As Davies himself has recognised, this target is very modest. It only applies to FTSE100 companies and concentrates on Non-Executive directors and not on Executives positions. Not many additional women would get into the boardroom. To achieve the Davies target the 100 top companies would only have to appoint 80 new women Non-Execs between them.
Yet, after a small early improvement, the Davies initiative seems to have stalled. The word on the street is that, after making an initial gesture, the existing boards of many companies increasingly take the view that they have “done diversity” and want to focus on more important business issues.
Time will tell whether the Davies approach will work. But of course, even if the 25% target is achieved, male board members will outnumber their female colleagues by three to one. Getting even close to parity will require continual pressure over many years.
The Norwegian approach is much more radical. Norway has passed a law that sets gender quotas for the boards of companies listed on the Oslo Stock Exchange. The proportion of women (and men) on these boards must not fall below 40%. The law was passed against the bitter opposition of the Norwegian business community. One businessman even suggested that the only way to get “these women” was to ‘phone up an escort agency!
Against such dire warnings, very able women were found to sit on the boards, the law did not damage business and most people in Norway now accept that company boards work better than ever. We organised a conference on the Norwegian quota law at the House of Commons earlier this year and the five experts agreed that there was no pressure to go back to the old days. Indeed the current debate in Norway is about extending the quota law to more companies.
What is the best way to correct the unfair gender balance in British business? Very many people in Britain, including many women, are anxious about a law that might, in some people’s eyes, make women into second class board members. That was also a concern in Norway but in the event the anxiety proved to be unfounded.
Across the world the Norwegian approach seems to be gaining support. It might even become the model for EU legislation. But in the end the outcome will depend on how quickly people want to remedy the major injustice. One of the Norwegians who spoke at the House of Commons Conference estimated that, at the current rate, Britain would not achieve parity of power in business for nearly a hundred years. He grinned broadly and then added, “But we all know that Britain is a very patient nation.”
Eva Tutchell and John Edmonds are writing ‘Man-made’ which explores why so few women hold positions of power in Britain. Their book will be published next year.