By Sara Mosavi, Employer Stakeholder Engagement Lead, CIPD
The CIPD calls on the Hampton-Alexander review to turn up the dial on gender diversity in the boardroom by setting up a separate target for women executive directors.
If, during the early hours of the 9th November, Hillary Clinton becomes the first woman elected president of the United States, she would smash through the ultimate glass ceiling. On the same day, the CIPD will be eagerly awaiting to hear the recommendations of the Government's Hampton-Alexander review of women on boards. Set up in summer 2016 and led by GSK’s Sir Philip Hampton and UBM’s Dame Helen Alexander, the review was tasked with assessing how to improve female representation in leadership positions across British businesses. It is a follow-up to the Davies review, which concluded in 2015, and oversaw a doubling in the proportion of women on FTSE 100 boards from 12.5% to 26.1%. The ambition has now been broadened to include the entire FTSE 350 and to raise the target to 33% of women on boards. The CIPD has long been in favour of voluntary targets as a route to greater gender diversity on boards. The progress the Davies review has fostered shows the approach works. However, the overall 26% figure is still far from gender parity and masks the fact that most of the gains have been made through an increase in non-executive positions. The numbers for women in the top spot executive positions who are visible to the wider organisation is still a paltry 9.7% in the FTSE 100 and 5.6% in the FTSE 350.To build on the successes of the Davies review, the CIPD very much hopes the Hampton-Alexander review will directly address the slow progress regarding female executive positions in its recommendations. Specifically, the CIPD believes there is a need for a separate voluntary target for female executive directors, aiming for at least 20% on FTSE 100 boards by 2020. Having a focused goal on executive positions means we can measure meaningful progression right at the top, and create more visible role models on the way too. It will also encourage businesses to think more strategically about diversity in their boardrooms, and consider how they nurture and promote talent, tackle bias, and foster an inclusive culture. We also believe that boards should reflect the 50/50 societal gender split so the overall voluntary target for female directors should be far more ambitious and set at 40% or above by 2020, with new targets set for following years. That would inspire organisations to continue building on their achievements so far and make significant progress towards greater gender parity in the boardroom, all within a sustainable and reasonable timeframe that will deliver results in the near future. Striving for greater diversity in the workplace is not about being a nice business. It’s about being a smart one. Study after study has enumerated the benefits of diversity generally and specifically of having more women in the boardroom. A study in the US showed that companies with a higher percentage of women on the boards have demonstrated better performance on measures such as return on assets and return on investment. Research also suggests that gender diversity on company boards leads to higher firm innovation, which in turn improves financial performance. Building more world-leading, high-performing and innovative British businesses has never been more important, and the evidence suggests that greater diversity in the boardroom could be key. Clinton summed it up best when accepting her nomination as the first female, major party candidate in a US presidential election: “When there are no ceilings, the sky’s the limit.”
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