Financial Times-Europe Leads But Women Will Not Enter The Boardroom ‘By Osmosis’

JUN 8, 2014 @ 06:18 AM 956

Europe Leads But Women Will Not Enter The Boardroom ‘By Osmosis’


Opinions expressed by Forbes Contributors are their own.

Language is often not meant to be gender-specific. So America’s Declaration of Independence : ‘We hold
these truths to be self-evident, that all men are created equal’ resounds around the world to assume both
men and women. When the Indian politician Arvind Kejriwal launched the Aam Admi party – Admi, which means ‘man’ in Hindi, was taken to mean ‘people.’ But when it comes to the language around the world’s publicly listed company boardrooms, the language of equality remains resoundingly male.

Now research by the Washington-based Corporate Women Directors International (CWDI), which has been keeping tabs on female board representation for decades, shows that pressure around concerns of corporate governance and better representation in Europe has led to results. Europe has 16 of the 25 Global 200 companies with highest percentage of board members. Norway’s Statoil leads the way, with 50%.

“Quotas are working. What is not working is doing nothing. Thinking that women will move up by osmosis is a mistake” said Irene Natividad, head of CWDI, on the report’s publication.
The image of Statoil’s boardroom is a powerful one – it looks odd when it is in fact, the future for
representative boardrooms. It still remains all-white, but it looks more like ‘real people’ than many
boardrooms today. Norway was first in Europe with legal quotas for the boardroom, but also has a culture that reinforces the message of real social and economic equality.

Jane Hinkley, a non-executive director with experience of several Norwegian boards, told me then: “One of the big social questions in the UK is a huge divide between business and society. The former is seen to be white and male dominated, whereas society is not. Unless we start by bringing in people from different walks of life, we will have a problem.” So there is still a long way to go.

The CWDI survey reveals that in Europe, seven French companies and three Italian ones lead in terms of
women on boards. Both countries have implemented legal quotas. The US, on the other hand, has eight
companies represented – whereas a decade ago it had 20 out of the 27 ‘best performers’ on gender diversity.

Only Procter & Gamble in the US stands out with 45.5% female directors – it has clearly worked out who is responsible for the purchase of many of its products: mothers.

The US shares the ranking of ‘lowest percentage increases in female board representation’ with China andJapan. According to the Financial Times, in the CWDI study, the only Asia-Pacific company in the top 25 is from Australia.

In the UK, change has been achieved through a combination of relentless pressure by the government,
business lobbying groups and closely linked initiatives such as the 30% Club. With constant publication of the state of affairs, companies are being named and shamed into looking for women for the boardroom. They are also increasingly taking action to ensure women are developed, mentored and promoted in the workplace to allow them to move towards those boardroom roles.

Glencore XStrata (now known as Glencore) recently became the latest FTSE100 company to announce it
was looking for a woman for its boardroom, in a bid to rid itself of being the last one with an all male board. The news came after the UK Business Secretary Vince Cable had blasted it in the media for occupying that position.

The publication of regular updates on the state of affair has also helped. EY – which is well ahead on gender diversity itself and sent a gender balanced team to Davos – has just published a report showing women represent only 4% of executive board positions worldwide in the power and utilities sector. It lists the top 20 global utilities with most women on boards as a ‘baseline’ for measuring progress going forward.

Measurement and publicity are time-proven ways to achieve change. But it is worth noting that in the UK, at least, this frenzy of seemingly independent but carefully co-ordinated activity has been born out of business terror of EU-imposed quotas for the boardroom. The social inclusion mentioned by Ms Hinkley in the interview mentioned above is unlikely to result from it in the near future, as that would take serious coordinated thinking and action on the role of business in society.

Those conversations have begun, as reflected in previous posts here. Alongside them, there are many small initiatives underway, including mine.

The power of grassroots movements for change in a world of social media should not be underestimated either. The UK’s 50:50 Parliament petition seeks to address gender diversity where it really matters: in the top positions of power. Then, perhaps, Statoil’s boardroom would no longer look like an aberration.