The NED
Penny Hughes, former president of Coca-Cola UK and Ireland and a non-executive director at RBS and Morrisons
"Over 18 years, I’ve been on boards for dozens of companies, and in that time there has been significant change. Looking back, my first board positions were through my network. Now, certainly in the FTSE 100, there’s a more professional process for building competent boards. That includes diversity not just of gender, but also of experience and outlook.
“The issue of non-execs is easier to solve than the executive one – we haven’t had the same spotlight or commitment from CEOs. The chief executives have to build the leaders of tomorrow, in a diverse way. I would never expect the executive population to end up 50/50, but I would expect it to end up more balanced than it is today. I don’t see [the 25% target] as a huge victory; it’s only a step along the way.
“The working environment is fundamental. It has to be one that acknowledges and supports a different work-life fit. Increasingly, I don’t think this is just for women. Many men want to take paternity leave and don’t want to sit at a desk nine to five. The workplace needs to change, with more mobile working, flexible work patterns and job sharing. I’m not assessing if someone is sat in a seat every day, I’m assessing output – and that can be generated in many different ways.
“In five or 10 years, we’ll see significant change, enabled by technology. If work becomes more flexible and digital, we will have greater diversity as a result.”
The chairman
Richard Burrows, chairman, British American Tobacco
“I think the bigger agenda is diversity in the broader sense. If you are
an international business and looking at strategy, it’s important to have perspectives from people of different origins.
“I’m not sure I buy into the data about better performance in companies with diverse boards. It’s just common sense. If you’re a FMCG business where half your consumers are women, of course you should make decisions with that kind of gender representation.
“We have a pretty diverse board already. It’s not easy, though, and requires some tenacious searching. But you can get there if you’re prepared to stick with it.
"We have a comprehensive diversity programme for achieving balanced management, particularly in relation to gender. Our intake tends to be roughly 50/50 male and female, and we have a high proportion of women up to management level – about three steps away from board level. But after that, the numbers fall away, and countering that is the challenge. It’s a long-term game. Our time horizon to make significant changes in management ranks is 2020.
“There’s no particular magic around 25%. The model emerging in Europe of at least 40% for both genders is probably better, but it shouldn’t be over-politicised. It’s down to each company to make its own judgment in the best interest of its shareholders. “Quotas shouldn’t be ruled out if necessary to get change. There’s no doubt quotas achieve change, and once change is achieved it’s probably easier to go from there. The unpleasant part of quotas is you may end up putting people into roles who don’t merit them. But assuming everyone is making appointments the proper way, that shouldn’t occur.”
The CFO
Evelyn Bourke, CFO, Bupa
“I’ve been lucky in my career, accessing informal mentoring from my bosses and working in organisations where I haven’t felt there were obstacles, only opportunities. When I was at Standard Life, my boss Alison Reed encouraged me to take board opportunities. I’m an executive director now, as well as taking on NED roles.
“I’m a great believer in people stretching themselves and exploring what they can do. In my managerial and leadership career, the most satisfying thing is working with someone and helping them realise their potential.
“That’s the same for men and women, but women tend to be less confident about their ability to go to the next step. I think mentoring and sponsoring are often the biggest levers. If someone is interested in their progress, it encourages them to go for more.
“We are probably beginning to butt up against a limiting factor: the supply of board-ready women for executive positions. Talented women with everything to play for come in, but a huge proportion fall off. It has to do with choices women feel they have to make between family and career. Organisations need to be attuned to things such as unconscious bias, such as getting past the perception that someone working part-time is less committed to the organisation than someone working full-time.”
The male CEO
Mark Gibson, CEO of the Whitehall & Industry Group, a charity that brings the public and private sectors together
“We have 11 people on our board: five women and six men. In the five years I’ve been CEO, I’ve always reported to a diverse board. By deliberately going for
a board of 11, rather than six, it’s easier to have that diversity.
“It’s made a difference to us as an organisation. Many of the people who use our services are women, so having a board which understands that and is representative is critical. Having diversity on the board means we better understand our customer base. The other issue is our staff, which is 80% female. The board would have no credibility if it were all-male.
“We have consciously made the effort to make our board diverse. In our recruitment ads, we say gender diversity matters, which usually gets a response. You have to work at it and be clear that diversity means something to you. And when it comes to decisions on appointments, you have to be clear about what you are trying to achieve.
“Since 2011, progress has been reasonable, but FTSE companies have got to take this seriously. If there isn’t steady and substantial progress over the next couple of years, quotas will be back on the agenda. The challenge is the FTSE companies: they have got to believe in this. It would be better without quotas, but they should and will be on the agenda if there isn’t continued progress – and I think a lot of FTSE CEOs would buy into that.”
The NED
Margot Daly, former CEO of Music Choice Europe and a non-executive director at Sports Resolution
“Hiring people is always the hardest thing. When people are older, they know the interview game and it’s trickier to know how they might act in stressful situations.
“I’m not sure people spend the same time looking at hiring for non-executive roles as they do with executive ones, but those are some of the most important roles. A lot of the corporate cock-ups I’ve been exposed to only happened because someone didn’t ask the right questions. And that’s the kind of thing that happens again and again.
“In my experience, women do approach and assess risk differently, and that’s key when you’re looking at NEDs. You need to be able to challenge, engage and help with better decision-making. You’re not there to run the company.
“I don’t love quotas, but I love what they do. I don’t generally like things that require people to hit the minimum standard. It’s so great when people can see, by their own enlightenment, that [having more diverse boards] enhances performance. Although I would rather see codes of practice, I’m a practical cynic and I think in this area we are going to need quotas. The UK will have to go kicking and screaming, though. And it would be great if firms surpassed 25% because they found having diverse boards drove performance, rather than because of legislation.”
For Part one of this piece, click here.
