Lord Davies, in his report Women on boards, called for 25 per cent representation by 2015 and FTSE companies to increase their use of executive search. Why? Primarily because this can proactively reach women with the required profile within and beyond FTSE companies and widen the talent pool.
Executive search firms supporting the FTSE 100 at board level responded by developing a code of conduct. This outlines key principles of best practice including setting diversity goals, balancing experience with relevant skills and giving support during the selection process. It helps boards assess candidates on capability and behaviours, so de-emphasising direct experience.
The results of increased use of search, together with sustained pressure to improve gender diversity, have brought a breakthrough in female non-executive director (NED) appointments. Representation on FTSE-100 boards rose from 13 per cent to 30 per cent of new appointments in 2011. Since March 2012, 49 per cent of non-executive FTSE-100 appointments have been women.
Business needs to grow the senior female talent pool and develop a better pipeline at all levels of an organisation
“Increasing diversity among executive directors is more complex. Search firms have a role to play but the main thrust for change needs to come from businesses,” says Michael Reyner, managing partner of MVM Consulting and author of Cracking the Code. “There is a shortage of women at executive level. Companies can’t simply hire their way out of the problem – that’s why quotas won’t work. Business needs to grow the senior female talent pool and develop a better pipeline at all levels of an organisation.”
This view is backed up by MVM’s own research and a 30% Club project led by McKinsey with 17 financial and professional service firms who wanted to uncover why women didn’t reach the top. Data showed similar attraction and retention for each sex to a certain point, but men are ten times more likely to make partner level.
Both found that:
- Leaders must champion creating a diverse workforce and cascade change through company structures – change requires real commitment and action;
- Meaningful targets must be set and progress measured – this will mean redesigning working practices, for example introducing flexible working and addressing imbalances in evaluation systems;
- Sustainable change will require behavioural transformation to create inclusive environments.
Solving the problem, it seems, is about appetite for change. Women, as well as businesses, need to adapt their behaviour. The 30% Club seeks to grow the talent pipeline through business-led initiatives. “As well as developing workplace processes to support women, it is important to mentor women which helps adapt and release their career potential,” explains 30% Club chief executive Helena Morrissey.
Commitment to the issue is increasing, according to Catherine Doig, Bank of America Merrill Lynch staffing executive for Europe, the Middle East and Africa (EMEA), who recognises the role of search firms. But she says: “Clients need to specify the importance of targeting and hiring more women in order to make it happen.”
Engagement with women is key and one-to-one conversations essential to convince them that a company or role is right for them. Search is helping, but it is long-term commitment to diversity as a business issue and collective action by business leaders that will bring sustainable success.