The value of gender diversity, including at Board and leadership level, does not need to be rehearsed. There is a business benefit as well as a very strong social case, and while cognitive diversity is obviously a tremendously important goal for Boards, it is unlikely that this can be achieved without gender diversity.
Great progress has already been made. In the UK, the Hampton-Alexander Review published its 2020 results in February, and its primary target of 33% women on FTSE 350 Boards has been met. Fidelio was recently accredited by the Hampton-Alexander Review for the fourth year running for our contribution towards achieving gender balance on Boards and leadership teams in the category ‘Beyond FTSE 350’. This reflects our recent track record: for example, over the past 3 years, our international Search assignments at Board, Leadership and Direct Report level have resulted in 41% female and 25% BAME placements.
But there is still a substantial way to go, both in moving beyond tokenism – according to the Hampton-Alexander Review 16 FTSE 250 Boards still have just one female member – and in ensuring stronger representation at Executive Committee level and below. Despite the hard work of Hampton-Alexander Review and other organisationd such as the 30% Club, the proportion of women Executive Directors in the FTSE 350 still languishes at just 12%.
In other countries the trend is similar, though the means to achieving greater diversity may differ: in Germany, for example, legislation is now coming into place to mandate female representation at Management Board level, in addition to the existing “Frauenquote” regulations for the Supervisory Board. Disappointingly, this new law has become necessary more than ten years after German business voluntarily committed to increase the diversity of its leadership teams.
On the other side of the coin, pressure from the capital market to increase diversity has grown. Institutional investors increasingly view diverse Boards and leadership teams as an indicator of sustainable management, and they are voting with their feet. Larry Fink’s annual letter to CEOs has been influential here, and in the UK LGIM has shown itself ready to engage on Board level gender diversity, with a vote against the Chair as the ultimate sanction. Investor focus has only become sharper with accelerating growth in ESG funds as shareholders expressly demand greater diversity alongside a commitment to action on climate change.
And while the pandemic has wrought many changes in both business and society, it is far from clear that gender diversity has benefited. For many in the UK, for example, the under-representation of women at daily Covid briefings has raised concerns about female participation in government decision-making at this critical time.
Fidelio also remains concerned that in some areas progress has been stalled. This was flagged in a recent Fidelio Chair Roundtable: our key speaker Hon. Julia Gillard, argued that Covid-19 is exposing and potentially exacerbating existing inequalities. For example, while working from home can create opportunities, there is also a risk of increased burdens on women, and critically of perpetuating existing biases. Fidelio has, with Kings College London, issued a clarion call for Chairs and Boards to ensure that as work practices are redesigned, diversity and inclusion are embedded. We will shortly be undertaking primary research with leading Chairs as to what works.
This theme of looking forward will also inform Fidelio’s forthcoming Board Development Programme “A Seat at the Table”. This Board Learning Programme has its roots in ensuring a strong pipeline of talented women for UK Board roles. We are delighted with its success and have gone beyond the original ambition by creating a still more diverse (by gender, ethnicity, geography, sector) pool of Directors who are also prepared and equipped to provide Boardroom leadership in diversity and inclusion.
On this International Women’s Day, Fidelio is delighted to celebrate progress to date but also very much focused on driving greater gender diversity. This is core to Board effectiveness and a central plank of the ESG Agenda.
Fidelio is committed to increasing gender diversity across Boards and leadership teams. If you share this commitment and would like to learn more about how we enable diversity through: Search, Evaluation and Development, please get in touch.