10 reasons firms give for having no women on the board

Suitcase-01We all know there’s an imbalance when it comes to the gender split of boards.

Although it’s recognised that a female perspective is a valuable addition to a board of directors, and that having diverse viewpoints is a plus, directors mostly persist in appointing new members in their own image – largely male, middle-aged and from similar socioeconomic backgrounds.

Why don’t boards appoint more female directors?

This week, a report from the government-backed Hampton-Alexander Review revealed the ‘10 worst’ explanations given by FTSE 350 Chairs and CEOs for having no women among their board members.

The top 10 excuses were:

  • ‘I don't think women fit comfortably into the board environment’
  • ‘There aren't that many women with the right credentials and depth of experience to sit on the board – the issues covered are extremely complex’
  • ‘Most women don't want the hassle or pressure of sitting on a board’
  • ‘Shareholders just aren't interested in the make-up of the board, so why should we be?’
  • ‘My other board colleagues wouldn't want to appoint a woman on our board’
  • ‘All the 'good' women have already been snapped up’
  • ‘We have one woman already on the board, so we are done – it is someone else's turn’
  • ‘There aren't any vacancies at the moment – if there were I would think about appointing a woman’
  • ‘We need to build the pipeline from the bottom – there just aren't enough senior women in this sector’
  • ‘I can't just appoint a woman because I want to’

The report calls the reasons quoted ‘shocking’ and ‘outrageous’, ‘pitiful’ and ‘patronising’.

Business Minister Andrew Griffiths points out that ‘our most successful companies are those that champion diversity’. This is something we’ve looked at previously, exploring the ways that businesses benefit from having more women among their directors.

Things are getting better…slowly

Although the number of all-male FTSE 350 company boards fell from 152 in 2011 to 10 in 2017, businessman Sir Philip Hampton, who is leading the review, said that companies still had a long way to go. The review panel has set all FTSE 350 companies the challenge of having women make up at least a third of their board members and leadership by 2020.

Hampton stressed that firms need to practice what they preach. In many cases, he said, we see ‘leaders expressing warm words of support but actually doing very little to appoint women into top jobs – or quietly blocking progress’.

Boards have previously been accused of failing to improve corporate culture, and this could be seen as an example of that.

Why are women good for boards?

  • Firms with diversity in leadership tend to be more profitable, according to research by Grant Thornton.
  • They help make better decisions. An article last year looked at whether the female brain may be the secret weapon of the best boards, claiming that typically female characteristics such as empathy, intuition and creativity can be essential to making considered decisions.
  • The ability to have gravitas and authority without being over-bearing is often seen as another female strength. Research last year by executive search firm Fidelio partners found that this was one of the attributes shared by successful directors.
  • Many of the qualities that are seen as important in board members – an eye for detail; the ability to constructively but sympathetically debate issues – are often seen as things that women have an affinity for.
  • The best decisions come from diverse boards that display a range of views. Research into the ideal mix of perspectives in the boardroom shows that having a good of blend of opinions, skills and experience will help you to avoid groupthink, herding and the other behavioural tendencies that hinder good decisions.

With all these advantages, it’s even more shocking that firms aren’t recognising the value of female executives and pushing for greater gender equality on their boards.

Of course, when it comes to good decision making and a strong, effective board, having female representation isn’t the only secret to success.

Making sure your directors have all the information they need can help with making informed decisions. And you can maximise your directors’ effectiveness by employing some techniques from behavioural science.

However your board is made up, you need to give members the necessary tools and data to make effective strategic choices. This means running meetings efficiently and providing user-friendly board packs.

Many boards are finding that using board portals to produce their papers delivers big improvements in terms of efficiency, user-friendliness and information sharing.

To find out more, you can read our Board Portal FAQs, which look at some of the most common queries about portals and their advantages. They’re free to download, and you can get your copy here.

Nothing in this document should be treated as an authoritative statement of the law. Action should not be taken as a result of this document alone. We make no warranty and accept no responsibility for consequences arising from relying on this document.

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