The Gender Gap: Why We Need More Female Non-Executive Directors

Paige Hawin discusses the business case for Board gender diversity.

Over the past few years, there has been a strong business case for greater gender diversity at board level.

Following Lord Davis’ 2011 government report in which he stated that FTSE 100 companies should have 25% female board representation, the majority of business leaders are quickly realising the benefits of gender diversity as a performance driver.

In his drive to produce boards that are one quarter female, Lord Davis has stated that company chairmen may have to increase the number of female non-executive directors (NEDs) to 50%.

Yet change is slow and the overall representation of women on European corporate boards, regardless of the role, remains limited.

Non-executive directors are there to provide an independent view and advice. They are there to guide management when they need it and focus on board matters. This is very different from an executive role, because NEDs are removed from the everyday running of business. The role is usually, but not always, part-time.

In January 2014, it was revealed that 25% of non-executive directors are women. Measures to implement change are certainly active, but still somewhat limited.

Gender diversity is being pushed in order to better the performance of corporate boards. There is a growing economic influence with women around the world as they bring certain advantages such as a range of perspectives and experiences.

There tends to be a preconceived idea that women are more emotional in the workplace whilst men take on bigger tasks and just get on with the work. There a connotations that women need encouragement and overthink situations. We are faced with a nation who typecast.

There is certainly an under-representation of women in decision-making roles in Europe. Females make up an estimated 60% of graduates in developed countries, yet, only one in ten board members are women.

Women are crucial in leadership roles for businesses to develop and succeed both in the short and long-term.

Although not concrete, it is widely acknowledged that women in the business sector are more aware of risks and are better at building long-lasting relationships with customers. Corporate boards can benefit from these traits.

There has evidently been an increase in the number of women that are taking non-executive roles, most noticeably in the last few years. Having diversity at the top is a vital but there still seems to be a huge lack of women in executive roles, where arguably, they have more responsibility and influence. An overall lack of diversity at the top could result in narrow decision making elsewhere in the company hierarchy. Female non-executive directors are a way to obtain more diversity at the top of the chain.

Non-executive roles are a great starting point but more needs to be done in order to fully utilise the skills and traits females are likely to bring to a board.

The odds of a female making it as a non-executive director, and no higher, are still slim. It can be argued that the odds are higher if a female non-executive director has stepped down previously. Overall, this makes little difference if to start out with, the majority of non-executive directors are male. More males are stepping down. Arguably, the process of selecting non-executive directors is not gender neutral.

By accepting women and building solid relationships, companies can hire the best talent for them. Each role should be focused on skills and experience rather than gender.

Some changes will need to be made at the top. Companies need to think about how they can accommodate childcare, maternity leave and short career breaks. These are essential for family and personal reasons. Businesses need to make sure that women can return to their posts with a way back on the path to the top.

The truth remains that men are still continuing to dominate jobs and roles at the top level. Employment rates and pay still differ but now a move is being made to promote females and create diversity.

The fact may be that when board appointments are made, qualified applications are predominantly male. Women aspiring to rise and lead need and want visible role models. There is a need for inspirational female leaders at all levels. This is something that boards are accountable for providing.

A great number of female non-executive and executive role models will encourage other women to try and work their way to the top. The seemingly-impossible actually becomes reality.

Companies need to tap into the female talent pool at leadership level to remain competitive and respond to rapidly changing expectations and market demands. Women on corporate boards and in executive roles ensures that companies remain competitive. Moving to allow more females onto a board is one way in which to keep up with changing market demands and expectations.

Boards and companies with more women at top levels are the future and more women are ambitious with their careers. Women are aspiring to be at the top, whether this is in executive roles or non-executive roles and the change needs to come about faster.

Image courtesy of: https://www.flickr.com/photos/samchurchill/10593863736

Paige Hawin has over three years’ experience in the recruitment industry and has worked for several organisations. She is now working on behalf of First Flight Non-Executive Directors and is spending more time in the field of Board Composition Analysis.

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