Yellow Jersey makes business case for more women on boards

Georgie Whittle, Accout Director at Yellow Jersey PR, and 30% Club member, explains how the business case for more women on boards is being promoted

Georgie Whittle, Yellow Jersey PRThere are more male CEOs named 'Steve' within the FTSE 100 than there are female CEOs. This bizarre, yet true, fact serves to highlight the extent of the gender disparity that company boards face in the UK. 

While there is much work to be done, there are a number of groups and initiatives, both political and social, working hard to shift the dial towards a more equal representation. Groups like the 30% Club, Women Ahead, City Women’s Network and Women Returners have been established to create an environment that actively supports women through the executive pipeline towards board positions, not just focusing on mid-career women, but also on school and university-age females, as well as women looking to return to work after an extended break.

The consequences of a lack of diversity for board effectiveness include a lack of appropriate representation and understanding of a company’s customers, workforce and geographic footprint – all key to successful delivery of long-term strategy. A growing body of empirical evidence corroborates the argument that diverse boards are more effective than ‘identikit’ boards in delivering better decision-making*.

Indeed, it is becoming widely accepted by companies globally that the range of different ideas, opinions and voices that a diverse board brings to the table helps to drive better corporate decisions regarding everything from profitability through to employee satisfaction programmes, helping companies to work more efficiently and to compete harder against their peers. 

In August 2017, the 30% Club, a global organisation founded in the UK in 2010 by Dame Helena Morrissey, wrote to FTSE 350 CEOs to urge them to commit to setting an aspirational target of 30% female representation in their senior leadership teams by 2020. While a number of countries endorse the use of quotas to solve gender disparity, the 30% Club seeks to achieve its goals by recommending targets, to be considered in the same way as any other business goal.

At that time, two FTSE 100 CEO Members and two FTSE 250 CEO Members were fully committed to the senior management target. Now, thanks to open engagement between the 30% Club and CEOs, that number stands at 30 FTSE 100 CEO Members and 28 FTSE 250 CEOs (as of February 2018).

A major issue – one which concerns firms more and more – is the role of diversity in regards to investment. Gone are the days when stakeholders were concerned solely with the returns a company was producing. Now, environmental, ethical and socially responsible behaviour, corporate governance and remuneration policies all play an essential part in whether investors will look favourably upon a company.

At a 30% Club Investor Group event held at the beginning of February at the London Stock Exchange, leaders from some of the world’s major pension funds and investment firms, including Hiro Mizuno, CIO of the Japanese Government Pension Investment Fund (GPIF), the largest pension fund in the world, pledged their commitment to exercising their ownership rights, including voting and engagement, to effect change on company boards and within senior management teams. 

As asset owners and asset managers, the members of the 30% Club Investor Group, which now total 27, with £10.5 trillion in assets under management, believe boards that genuinely embrace cognitive diversity, as manifested through appropriate gender representation and a broad spectrum of skills and experience, are more likely to achieve better outcomes for investors.

The momentum behind this group thinking and positive activism will help to trigger a better, more varied and inclusive business approach. As more women join boards and demonstrate the value they add, the system will become self-perpetuating.

 

* The following eight studies, based on different geographies and with a specific focus on gender diversity, support the intuitive view that diversity at board and management levels improves financial performance:

 

  • Petersen Institute: Is Gender Diversity Profitable? Evidence from a Global Survey, February 2016
  • MSCI Women On Boards: Global Trends in Gender Diversity on Corporate Boards, November 2015
  • Grant Thornton The Value of Diversity, September 2015
  • Credit Suisse The CS Gender 3000: Women in Senior Management, September 2014
  • Credit Suisse Gender Diversity and Corporate Performance, August 2012
  • McKinsey ‘Women Matter’ Series, 2011-2014
  • Citigroup ASX100 Women on Board Analysis, August 2011
  • Catalyst ‘The Bottom Line: Corporate Performance and Women’s Representation on Boards’, 2007

   

www.yellowjerseypr.com

 

 Yellow Jersey is a COBCOE Corporate Partner.


 

 

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