Unsurprisingly, yesterday’s final Five Year Report on the Davies Review has ignited a flurry of press and online comment, and here at Discovery Performance, we just had to add to it…
The Davies Review, a steering group lead by Lord Davies of Abersoch, was formed in Autumn 2010 to investigate the low representation of women on FTSE boards. As a result of their research, a target of 25% of FTSE 350 boards being female by 2015 was set, and, as the final report shows, exceeded (26.1%). But there’s a lot more to the story than the facts and figures.
A ‘profound culture change’?
According to Lord Davies, the campaign has constituted a ‘near revolution’, causing a ‘profound culture change at the heart of British business’.
Hang on a minute, a profound culture change? In five years? Profound steps forward have been taken towards a profound culture change, undoubtedly, but overstating the success could actually inhibit further progress. Despite the pioneering attitude and actions of Lord Davies and his steering group, exaggerated claims like these can eclipse the need for continued work. After all, cultures, famously, do not change overnight.
When Henry VIII broke with the Church in Rome in 1534, did England transform from a Catholic to a Protestant country? Constitutionally, maybe, but culturally? Not so much. It took decades for the population to change their practice, never mind their beliefs. Most of the upper echelons of society at least nominally made the switch, just as most of the FTSE 250 companies have wiped out all-male boards, but did either event really signal a ‘profound culture change’ after just five years?
Boardrooms as mirrors
Unquestionably, the Five Year Review represents a great start, but that’s just what it is, a start. Of course, it’s fantastic that the number of women on FTSE 100 boards has more than doubled since 2011. Even better is the fact that they are from ‘varied and diverse backgrounds’. Except… that’s not quite as true as the five year review would like to boast, is it? Only 2% of FTSE 100 chairs are from ethnic minorities, whilst almost 1/3 of the women appointed to boards come from elite universities, so how varied and diverse can these new-look boards truly be? Diverse relative to 2011, perhaps, but not relative to British society. And isn’t that the overall aim of this campaign, as Melanie Richards, Vice Chairman at KPMG, puts it, ‘creating boardrooms that truly mirror our society’?
The blogosphere is by no means the only place this narrow focus has been criticised; for example, in the House of Commons this Wednesday, Chuka Umunna called for a target of no ‘all white’ FTSE 100 boards to be set for 2020. In the world of recruitment, training and development, discussion of the pitfalls of surface-level diversity is gaining steam. Though the Davies Review lauds the benefits of diverse perspectives, it fails to acknowledge the role of unconscious bias in any area but gender. The bare bones of an intersectional approach are there, in the few pages where the backgrounds of female appointments are examined, but this largely focuses on their employment histories, which is hardly the most pressing issue when it comes to prejudice!
As a respected businessman, Davies used his privilege to great effect leading the steering group. With his team, he built a persuasive business case for equality, citing benefits including selecting from the whole talent pool, greater responsiveness to customers, and improving all round performance. Surely the logical conclusion to this thought is that the greater diversity in perspective as well as background, the more business sense equality makes?
On the flipside, it is also essential to take a far more intersectional approach than has been used in the past five years, recognising that issues of race, sexuality, gender and socioeconomic background intersect to create privilege or disadvantage, and taking this into account during recruitment and development.
‘Diversity isn’t just a boardroom issue’
Getting more women into the upper levels of the business world is important, necessary and commendable, but keeping them there is a different matter. A crucial issue facing women in the workplace is the issue of family; widespread maternity discrimination combined with the prohibitive cost of childcare is a hugely prohibitive factor to the development of female talent in the business world.
Claiming to have already having enacted a profound culture change ignores the sobering fact that the female talent pipeline is being cut off by an inherently gendered discrimination in the workplace. How could a review of women in business fail to acknowledge one of the biggest gender-specific challenges women have to face? Despite the Equality Act of 2010, the ‘motherhood pay gap’ is all too real across the sectors, and across companies within them. More than 1 in 20 women surveyed this year report experiencing a pay cut after returning to work.
And that is when women are able to stay in their roles; a report published this year by the Equality and Human Rights Commission found that 54,000 new mothers a year are forced out of their jobs, a higher figure than ten years ago. Clearly, something is wrong here, and desperately needs addressing. Of course, focusing attention on women in boardrooms does not mean the issues surrounding maternity are not being considered. However, the danger of camouflaging the problem with more superficial successes is very real, not least because it gives those who would rather not see change like this a perfect opportunity to wave 26.1% around as though equality has been reached in every area, and no longer needs our consideration or action.
‘What gets measured gets managed’
Despite the huge leap in female board members in the past five years, the proportion of female executive directors remains below a pathetic 10%, a fact which is highlighted in Davies’ final report as the next area for work. Why, then, has a goal of 33% female board members by 2020 been set, but no fixed target for female appointments at executive level?
The fact that no enforced quotas have so far been necessary to achieve the campaign’s goals is fantastic news, and the success of a voluntary, business-led approach is truly encouraging, but it is crucial to keep momentum going to push forward further change.
As Dianah Worman, diversity advisor at the CIPD, highlights, transparent targets and the accountability they promote are what lead to real action. Worman’s suggestion of a target of 20% female executives in FTSE 100 companies by 2020, for example, would put pressure on companies to act, proposing an achievable goal without setting the bar too low.
This unwillingness to set firm targets was echoed in a recent global survey by Weber Shandwick which found that that, although 73% of respondents believe gender equality will be achieved at executive level by the year 2030, only 44% said they had goals in place to achieve this. Surely this reveals the failure of the Davies Review to set executive goals when their original ones were demonstrably so attainable.
Transparency is absolutely key, and whilst sustained, steady change will undoubtedly bear more long-term fruit than flashy headlines or enforced quotas, far more wide-reaching change needs to be implemented; paying lip service to equality at lower levels of an organisation in the final report is not enough. For example, why focus so narrowly on boards, when it is at executive level that directors really have the power to directly affect an organisation’s culture? Why not focus at improving diversity and equality throughout an organisation, which would strengthen the talent pipeline and improve the workplace at every level of the company?
And, if the review will focus on boardrooms, why only a measly 8% increase targeted for the next five years? If the report shows anything, it’s that the bar could have been higher the first time around…
Just the beginning
So, although it is tempting to console ourselves with small successes, it is clear that the fight for true workplace diversity has only just begun, and will require a sustained effort.
As Liz Bingham, EY managing partner for talent, perfectly summed up this week:
‘Now is the time to fast forward the pace of change’.
Written by Florence Sturt-Hammond
Sources
http://www.cipd.co.uk/binaries/gender-diversity-boardroom_2015-reach-for-the-top.pdf
http://www.hrmagazine.co.uk/article-details/inclusive-cultures-attract-the-widest-pool-of-talent
https://www.gov.uk/government/speeches/nicky-morgan-lord-davies-review-on-women-on-boards
