With diversity on boards a key issue for corporate governance, one of our UK corporate secretarial experts discusses the recent UK government report into Women on Boards
It is now accepted that gender and other types of diversity in the boardroom have positive, tangible results - from a better corporate culture, to better stakeholder engagement and better financial results. Diversity leads to an enhanced reputation for a corporate amongst all its stakeholders including clients, customers, shareholders and employees. The under-representation of women in senior roles and at board level has been shown to impact the performance, governance and reputation of companies as they fail to attract and retain the widest possible range of talent.
There are many women in the company secretarial profession and a large number of these sit in the boardroom on a regular basis through the year. As Peter Swabey, Policy Director for ICSA, the professional body for the UK company secretarial profession, points out in his March 2014 blog, 30 of the company secretaries of the FTSE 100 are female but they seem to have been overlooked as board candidates. He points this out in his letter to Lord Davies, who recently published his annual report on progress on Women on Boards. Female company secretaries have a direct hotline to the directors by virtue of their position; they are also able to have a voice and exert significant influence on their boardroom colleagues.
So what is stopping female company secretaries taking the next step? Women understand the director role well and the risks associated with it, as well as how to create an effective corporate governance framework within which good decision-making can take place. We need to change the perception that a woman's role is still mainly administrative.
Confidence can play a large part in this. Women often have a natural inclination to doubt their abilities. They under-value their contribution, or, if they have not done something before, they may well disclose this at interview, potentially highlighting it as a weakness.
There are few examples of corporate secretaries in the UK taking on non-executive directorships to date for others to hold out as role models, notably Helen Mahy, Company Secretary of National Grid who until recently was a director of Aga Rangemaster Group. The SpencerStuart UK Board Index 2013 also highlights ongoing concern over the female executive pipeline generally. Only 22% of FTSE 100 female executive committee members have a non-executive directorship and - of even more concern - only 6.9% an executive directorship. More can be done in this area by companies as well as the executive search agents who advise them taking a broader look at the marketplace for candidates.
Whilst there is undoubtedly a greater understanding of the issues that have historically prevented many women from reaching the boardroom during the course of their careers, and companies are starting to address these issues such as developing flexible working, there is still some way to go. Lord Davies set a target in 2011 of achieving 25% in 2015; his latest annual report shows that women account for 20.7% of board positions in the FTSE 100, an increase from 12.5% in 2011 and 17.3% in April 2013. This is good progress towards women making up 50% of the board members of the FTSE 100 companies to reflect the demographic of the general population. Tapping into the female pool of senior company secretaries could bring clear benefits.
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