Women on Boards Vanessa Williams Managing Director, Awen - PowerPoint PPT Presentation

Women on Boards Vanessa Williams Managing Director, Awen Consultants Limited Founder, Governance for Growth Director & Lawyer, Excello Law Limited

AGENDA • Personal background/perspective • Information sources • Where are we now – UK? • Where have we come from: • FTSE 100 • FTSE 250 • Comparison with Europe • What approaches can be taken? • The business case • What next? • Conclusion @Govgrowth

Personal Background/Perspective • Business Lawyer/Founder member of EWLA • Career as board member of London law firms • NED & Company Secretary, Women of the Year • NED & practising lawyer, Excello Law Limited • Managing Director, Awen Consultants Limited: • Business advisory • Investment facilitation • Governance for Growth • Author, Due Diligence: A Practical Guide @Govgrowth

Information Sources • Annual Female FTSE Report – latest version March 2015 • Annual Davies Review on Women on Boards – latest version March 2015 • Egon Zehnder 2014 European Diversity Analysis (covers companies with min. market cap of € 4 billion or min. 5 largest companies in a country) @Govgrowth

Where are we now – UK? • Overview: • FTSE 100: • 23.5% women on boards • No all male boards • 263 women in total • FTSE 250: • 18% women on boards • 23 all male boards • 365 women in total @Govgrowth

Where have we come from – FTSE 100? FTSE100keyfacts 2010/11 2015 Change 2010-2015 Representation ofwomenonFTSE 100 boards 12.5% 23.5% +11 percentage points Number of companies with 25%+ representation 12 41 +29 Total number of women on FTSE 100 boards 135 263 +128 NumberofwomenNon-Executive Directors 117(15.6%) 239(28.5%) +122 Number of women Executive Directors 18(5.5%) 24(8.6%) +6 Number of womenChairmen 2(2%) 3(3%) +1 Number of women Chief Executives 5(5%) 5(5%) unchanged Number of all-male boards 21 0 - 21 Number of women appointments in the year 18 (out of 135) 52 (out of 164) +34 % of women appointments in the year 13.3% 31.7% +18.4 percentage points @Govgrowth

Where have we come from – FTSE 250? FTSE250keyfacts 2010/11 2015 Change 2010-2015 Representation ofwomenonFTSE 250 boards 7.8% 18% +10.2 percentage points Number of companies with 25%+ representation 17 63 +46 Total number of women on FTSE 250 boards 154 365 +211 NumberofwomenNon-Executive Directors 127(9.6%) 340(23%) +213 Number of women Executive Directors 27(4.2%) 25(4.6%) - 2 Number of women Chairmen - 8 - Number of women Chief Executives 10 9 -1 Number of all-male boards 131 23 -108 Number of women appointments in the year 19 74 (Out of 310) +55 % of women appointments in the year 13% 23.9% +10 percentage points @Govgrowth

How does this compare to Europe? % Boardpositions held bywomen Companies Austria 6 10.7% Belgium 8 20.2% Denmark 8 20.2% Finland 6 32.1% France 58 28.5% Germany 44 16.6% Greece 6 9.9% Italy 19 20.2% Luxembourg 7 8.9% Netherlands 22 19.5% Norway 7 38.9% Portugal 6 5.2% Republic of Ireland 14 16.3% Spain 20 15.5% Sweden 21 27.5% Switzerland 34 13.9% United Kingdom 70 22.6% Europe Overall 356 20.3% @Govgrowth

How does this compare to Europe? League table: 1. Norway – 38.9% 2. Finland – 32.1% 3. France – 28.5% 4. Sweden – 27.5% 5. UK – 22.6% Range: 5.2% - 38.9% @Govgrowth

What approaches have been taken? • Voluntary Targets • Central to UK approach: 25% target by 31.12.15 • Supported by: • Voluntary Search Code – set of principles agreed by search firms • Changes in Corporate Governance Code – publish diversity policy and no. of women • Government requirement for narrative reporting: companies must disclose number of women at different levels • Regular letters from government • Regular research reports naming companies • Peer pressure • Engagement with Chairmen @Govgrowth

What approaches have been taken? • Quotas • More than 20 countries have adopted • Norway first and most prominent • target 40% • non-compliant companies face being dissolved • 9% 2003 – 40% 2012 • France also committed to quota: 40% by 2017 • 7.2% 2004 – 28.5% 2014 • Belgium target 33.3% by 2018 • 23.4% 2015 @Govgrowth

What approaches have been taken? • Corporate Transparency: • Reporting on gender policies and numbers of women: • EU non-financial reporting directive: large companies to disclose information about diversity of boards • Australian Stock Exchange corporate governance code amended comply or explain policy to include gender diversity • Ontario Securities Commission has proposed similar comply or explain requirements • UK Narrative Reporting Regulations 2013 require gender breakdown at board, senior management and across workforce • EWLA has recommended more visible statistics in annual reports – 8 th Congress, Zurich @Govgrowth

The Business Case • Micro-economic perspective : • Improved company performance: • McKinsey & Company: companies with most gender-diverse management teams had 17 % higher stock price growth between 2005 and 2007 / their average operating profit was almost double the industry average between 2003 and 2005. • Catalyst: companies with more women on boards achieved 42 % higher return in sales, 66 % higher return on invested capital and 53 % higher return on equity. • A gender-balanced board is more likely to pay attention to managing and controlling risk. @Govgrowth

The Business Case • Micro-economic perspective : • Mirroring the Market: • women control about 70 % of global consumer spending. • more women in management provide a broader insight in economic behaviour and consumers’ choices, leading to market share gains through the creation of products and services more respondent to consumers’ needs and preferences. • Enhanced Quality of Decision-making: • Diversity boosts creativity and innovation by adding complementary knowledge, skills and experience. • Diverse boards contribute to better performance because decisions are based on evaluating more alternatives compared to homogenous boards. @Govgrowth

The Business Case • Micro-economic perspective : • Improved governance and ethics: • Various studies have shown that the quality of corporate governance and ethical behaviour is high in companies with high proportions of women on boards. • Better use of talent pool: • More than half of students graduating are women. • By not including them in decision-making positions, female talent would be underutilised and the quality of appointments may be compromised. • Systematically including suitable candidates of both sexes ensures that board members are selected among the best distribution of both men and women. @Govgrowth

The Business Case • Macro-economic perspective : • Ageing population/shortage of skilled labour: • poor career prospects discourage women from continuing in paid employment - puts increasing brake on economic growth. • absence of women in senior positions may trigger vicious cycles that further widen both gender employment and gender pay gap. • Strong economies and sustainable pension systems: • will depend on higher female employment rates and high wage returns on paid jobs. • incentives needed for women to stay in workforce, including credible prospects of career progress – includes opening door to top management positions. @Govgrowth

What Next? • Building pipeline of executive women – encourage women earlier in careers • Change organisational culture – agile working, flexibility • Transparency within board appointment process – recruit from wider pool e.g. entrepreneurs, lawyers, academics • Higher board turnover to create more opportunities – shorter terms • Encourage champions of change within companies – Chair & senior managers set culture @Govgrowth

What Next? • Encourage champions of change outside companies including investors, pressure groups etc • Promote good practice amongst recruiters • Encourage social policies that support women e.g. shared parental leave, tax credits for childcare • Training for women • Role models • Improve female confidence @Govgrowth

Conclusion • Quotas have had quickest impact • Voluntary regimes are progressing, if more slowly • There are clear social and economic benefits from getting women on boards • It is becoming unacceptable to have male only boards • Change needs to continue • Diversity needs to be addressed in all its forms – this is just the beginning @Govgrowth

Contact Vanessa Williams: vwilliams.awenconsultants@yahoo.co.uk +44 (0) 7425 873 030 @iVJW @Govgrowth @Govgrowth