How it helps and what we can do
Diversity is always an issue that causes much discussion, and this week there are interesting findings about the role of women on UK Boards. According to the law firm Eversheds, the best performing companies are likely to have a smaller Board size and a high proportion of female directors (the study included 241 companies).
While most would argue against positive discrimination – appointing women just for the sake of it — it is clear that more diverse Boards are able to consider different points of view more effectively. Business Secretary, Vince Cable said, “Increasing female Board representation is a win-win proposition for business. Well-balanced Boards with broader experience introduce fresh perspectives and new ideas, which help improve performance and boost productivity.” (The Telegraph, 13th March).
The UK is making steady progress towards the goal, set by Lord Davies, of having 25 percent female Board members by 2015. This week’s additional findings (from the Cranfield School of Management’s annual female FTSE report) show the following trends:
- A quarter of new FTSE 100 Board hires made in 2011 were female (47 appointments)
- The total number of female-held directorships in blue chip companies is now 15.6 percent
- The number of FTSE 100 companies with entirely male Boards has dropped to 11
- The number of FTSE 100 companies with more than one woman on the Board has increased to 50
Although the UK is making progress, there is still a lot that has to be done. Most of these roles are non-executive appointments, meaning that most executive roles are being given to male candidates. Also, it is a long way to go from 15 percent to 25 percent in four years. When we compare ourselves to our European neighbours, we are not leading the way. Norway is in front with 37.9% women on Boards. Maybe that should be our benchmark.
In general, diversity can make decision-making more challenging as people approach the issue from angles and draw on different information and knowledge. One tool that Boards can use in those situations is what we call ‘positioning’. This is a process that helps to ensure that there is clarity and alignment at the top before the agreed strategy, change programme or business as usual communications are rolled-out to the whole organisation. Having clarity means that we can all use the same language, and drive business performance more effectively. It does not mean that we squash out creativity and personality, quite the opposite. Having agreed positioning will help everyone focus on the right things while allowing leaders to make the messages meaningful for their local and varied audiences.