Here are some notes made by Tanya Castell and I who attended this conference in September. It covers initiatives resulting from the Norway quotas policy, recruitment of NEDs, mentoring opportunities, equality in law and changes to the public appointments in Scotland.
David Watt (IOD Scotland) introduction
IoD is looking to support women seeking board positions – mentoring being one way.
Professional boards forum Elin Hurvenes
- A 2002 survey of the boards of companies listed on the Norwegian stock exchange showed that 75% were made up of 53-64 year old men who were all living near Oslo within 5 square miles! It should be noted that companies in Norway have a two tier system – an executive and an a board providing oversight– the CEO may attend the board but does not have a vote.
- At the time there were 6% women on listed company boards and Minister of Trade and Industry Ansgar Gabrielsen wanted 40% – if not the company would be delisted or closed.
- There was a lot of opposition including from women ie 6/10 women didn’t want a quota. So companies were given 2 years to tackle the problem and the number of women went to only 7.9%. Some chairmen tried e.g. Christian Rignes brought on a young 30 something singer song writer onto his property company board. When questioned he replied that she brought a different perspective. She was successful in her role on his board and was given another board role demonstrating that you don’t have to be a CEO to contribute.
- The boards didn’t know where to find women with the necessary skills and thought that they aren’t interested. Elin put forward the people she knew and brought them together in a structured setting.
- Elin observied that women did not seem as good at self-promotion. Women at networking events listen to men telling them about their mission – Oslo business school put a board case together and got them to simulate a board meeting and for the chairmen and investors to observe this (this is the format of the Professional Boards Forum – the first was held in 2004). When given a task the women felt more comfortable. The chairmen thought that different backgrounds did bring different views and perspectives. It demystified what boards do.
- The press were also quite instrumental in supporting the changes to the board and would query companies at their AGMs.
- 2008 they reached 40% board target. A board impact conference was held in 2010 with 30 nations present to share the Norwegian experience of the quota law. They all said they didn’t approve of quotas but they are happy with the results. They all said they wouldn’t go back. Changes that have been observed are that board members are better prepared as they don’t get air time if they don’t read their papers ahead of time. Women are better at this. It’s a more informed board with a better atmosphere. The meetings may take slightly longer as there is a wider discussion but that is a better outcome.
- Started in the UK in May 2009 with Jane Scott with 25 FTSE 100 chairmen (despite a Bank of England Governor saying there was no need and there would not be any take-up). Sir Philip Hampton (then chair of Sainsburys, now RBS) helped at the start and provided sponsorship. There are 2 forums a year lasting 4 hours which 50 women attend. 25 women have got board positions now not just because of this forum but because they understood how to communicate their abilities and did so to the right people. In Norway 50% of attendees found board positions. The women who got them networked. The ones that didn’t were not focused or had other higher priorities eg. challenges in their personal lives.
Challenges for women wanting to be on boards:
- Recognise your strengths
- Align your confidence to your ability
- Raise your profile and visibility
- Communicate your aspirations
- Build support
Eilidh Wiseman Dundas & Wilson
- It is estimated that 63% of women do law at university, make up 35% of those in professional practice but only 20% of law firm partners are women (32% of MPs are female with the percentage even higher for MSPs).
- Clients ask law firms about their equality strategy which helps keep the pressure on
- Career progression is the issue – the marzipan layer just below the top does not have enough women
- There are companies taking positive action measures eg Tesco and Diageo
- Diversity is good for business to prevent group think as women ask awkward questions and will take a rounder view.
- the equality duty in Scottish means that the public sector are moving faster forward with regards to equality action then other parts of the UK.
- Using the nudge theory is one approach which has been the strategy for area such as flexible working. Not everyone is automatically given the right it has not been imposed like the quotas in Norway.
- When Eilidh was at University 15% of those studying law were female and whilst the ratio of trainees was 50:50, those hired at the end were 75% women. However she did not make partner when she expected which she thought was because she was pregnant at the time so she did not announce her second pregnancy until after the partnership decision.
- The need for people to be present in the office is less of an issue than it was in the 80s.
- The gender pay gap is still an issue and there needs to be more transparency to address this.
- It is important to remember that a career is a marathon not a sprint and so it should not be seen as negative to take a less demanding role in the officer in order to have time for things outside of work.
Barriers:
- Part time working – 89% of equity partners in legal firms work full time
- Career breaks and motherhood
- Childcare
- Client demands
- Gender pay gap which widens – after 5 years in law it is £9k but increases to £36k after 21-25 years in law (voluntary guidance has been issued by the Home Office, supported by the CBI, for private sector employers on this)
In a 2006 survey, 53% of women said they didn’t want to be partners because of wanting a work life balance (for men it was only 7%). At D&W, the firm offers all employees flexible/part time working of which 132 employees work flexibly but the question is how many men consider this? According to Sex and Power, the Equality and Human Rights Commission’s annual report looking at women in positions of authority and influence, key changes required are more honesty about perceptions around flexible working and more open pay reporting. The recent Sex and Power report refers to the marzipan layer where women are trapped partly due to personal responsibilities.
One of the challenges for a Law firm is that they have to respond to clients’ needs ie clients want the same lawyer regardless which day of the week it is. Th is generates a vicious circle that part time workers get less interesting work which leads to disengagement which can lead to a decline in performance. Women do need more confidence but self de-selection can be tackled by mentoring. Law firms need to be more proactive around flexible working, openness on equal pay (or allow audits) and provide mentoring.
Caroline Donaldson, Kynesis:
Caroline has been working with the IoD to provide mentoring. For thisto be effective the relationship between mentor and mentee is critical hence the importance of matching and there needs to be commitment to the process. The IOD is looking to expand its mentoring programme.
Dominic Schofield Korn Ferry
Recruitment of NEDs has changed significantly in the last 10 years due to the extensive guidance issued around corporate governance. In the past not many boards used an external provider but now all the major companies do. The recent voluntary code of conduct produced by headhunters following the Davies report, requires 30% of the long list to be women. However ultimately boards are looking for diversity of gender, experience and culture.
Most of the FTSE 250 boards will look at directors’ competencies eg leadership experience, change leadership, environment/health & safety knowledge, financial acumen, City/PLC experience, sector expertise and rank individuals. NEDs are not expected to have all of these but the board does. Also more boards are also looking at their directors’ behaviours e.g. their abilities to be problem solvers, innovative, build relationships, community clearly etc. Sometimes boards event use psychometric testing.
What makes a good NED:
- Breadth of experience
- Team player (no ego)
- Challenge and support – ability to act as an independent advisor
- Committed and prepared
- Articulate communicator and a good listener
- Sharp minds and good judgement (need an understanding of finance language)
- Visionary, creative and passionate about the business
- Able to build strong relationships and act as ambassadors for the company
- Self confident but not dogmatic
- Willing to enhance their contribution through feedback
How to become a NED
Step 1
- Understand your options
- Appraise yourself honestly
- Research NED roles and board dynamics – what does it involve
- Understand the search process – more subtle, do your due diligence
Step 2
- Think ahead – 3 years plus second term, ie 6 years, need to seek next role
- Be aware of potential conflicts ahead – companies, relationships, commitment,
- Sharpen up finance skills
- Get your equity card ie sit on a board such as a charity/not for profit first before considering a plc
Stage 3
- Choose your head hunter- who does the research or work on the boards? Get an introduction to the head hunter – don’t go in blind.
- Network
- Interview well (be prepared to critique the company’s strategy)
Overall keep the faith (don’t give up – it takes a long time)
NEDs need to do 25-40 days including paperwork plus additional visits, and travel to build relationships which all takes time. In the past people held an executive position plus a not for profit and an NED role. Now they tend just to have one NED position for developmental purposes which should be encouraged.
Public sector boards Karen Carlton Scotland
Minsters are regulated when making public appointments in Scotland. If the ministers don’t follow the guidance then they are reported to parliament. This covers bodies including the NHS (e.g. health boards, overseeing waiting lists, ambulance services), the parole board, Visit Scotland, Scottish Natural Heritage, national galleries, museums, Sport Scotland. In total there are 75 boards comprising 620 positions. Some of these are substantial e.g. the Strathclyde Health board has a budget of £2.5bn
A new code of practice was launched on 1st September this year on recruitment to public bodies (with a handbook to support it). When recruiting the body should ensure it states what its purpose is, what it wants to achieve and the context of the role in addition to the skills and knowledge required for the position. The body also needs to consider what skill gaps they have when doing succession planning and ministers have to defend reappointment ie review of performance of outcomes and compared to the future requirements of the body. This means that there is less opportunity for people to stay on.
Scottish ministers have given a commitment that the applicants will be 40% women by March 2012 and also have targets for other protected characteristics e.g. disabled, religious, gay, socio economic back ground, geography. Currently 34% of applicants come from women and 37% of women are successful. The recruitment process is tailored to the situation e.g. ministers might not advertise or require an application form if they want a homeless person on a housing board or a person with learning difficulties on a education board. In these situations the interview may be informal. Other approaches could be a telephone conversation, reading a case study, using a development centre, or psychometric testing though usually there is a meeting with the candidate.
What next:
- Go to the website, Appointed- for- Scotland.org, for current roles being advertised.
- Ask to attend and observe at an open meeting and see the board in action.
- Mentoring partnership Scotland www.garthasscociates.com
- Join Non executive network on LinkedIn
ask yourself ‘what’s the question where the answer is ‘me’?’