The boardrooms creating a new kind of glass ceiling for women
The sound of corks popping, and rousing applause could be heard when it was announced recently that women made up over 50% of new FTSE 350 boardroom directors in 2020.
There was also a collective cheer from all of those who’ve been pushing for greater diversity in the boardroom. This was the second year in a row that this target was achieved. Could this change finally be picking up momentum?
Being a female-founded business, Lightbulb has always been focused on driving greater gender equality, diversity and opportunity in the workplace, from entry-level to the boardroom.
While having more female representation in the boardroom is encouraging, a closer look at the statistics reveals some troubling and short-sighted thinking.
The figures showed that:
Most appointments were for non-exec positions
Two-thirds of these positions were taken by those with previous board experience or who were retired
80% of positions were filled by white people. Only 3% were black.
The UK non-exec boardroom is still a club
The unwillingness of companies to look outside of a perceived ‘elite’ when it comes to non-executive director appointments has created another kind of glass ceiling. Many of those who sit on boards hold multiple non-executive director positions, reducing the opportunities for others even further.
Even for women joining boards, there are certain expectations on the age, background and tenure of those who are appointed. As of February 2021, there were only 41 women chairing FTSE 350 companies compared to 309 men. The average age of a NED is now over 60 years old.
This unwillingness to take chances on talent with an unconventional career path is a missed opportunity.
Lightbulb’s Founder and Managing Director Fiona McKay has personal experience of this:
“Having been asked by a private equity investor to potentially join the non-exec board of one of their hyper-growth tech portfolio companies in the US, I was interested and excited to bring my experience, independence and approach to the board and the company.
Upon meeting the non-exec board, it was clear it was going to be interesting; they were all male, white, with an average age of 70 and Oxbridge or Ivy League-educated.
I was really honoured and impressed by their previous leadership, business results and pedigree and could see that I could bring a really different dynamic and complementary input. I wasn’t a college graduate. I left school at 16 and embarked on my leadership and entrepreneurial career in a non-traditional way. I also come from a very working-class background in Manchester, in the North of England.
The interview and meeting went well until the Chairmen wrapped up with a comment ‘Fiona, what a fascinating female you are, AND from the North of England too, who knew that existed?’
Needless to say, I politely declined. Some boards aren’t ready for diversity and are not prepared to hear women’s voices and that is a fact. Investors don’t want to deviate from the norm of what I call ‘The Peregrine and Percy Principle’ - the all-male gang that they went to the best schools with, who they appoint to the boards of companies they’ve invested in. It’s group think personified. ”
— Fiona McKay, Managing Director of Lightbulb Leadership Solutions
Diversity is still an issue
The figures for the new board positions filled in 2020 showed that 80% went to people who were white, 3% black and a large part of the remaining roles went to people of Asian origin.
These figures are frankly appalling, especially for many companies who pride themselves on their D&I initiatives. What type of signal is this sending to people in those organisation’s if they know that right at the top of the non-exec board it tells a different story?
UK companies are already falling behind their European counterparts when it comes to diversity and skillsets on their boards, and it won’t be long before that gulf widens even further as those companies reap the benefits of this diversity.
Maturity isn’t always the answer
That’s a big statement, but it’s time now to talk truth to power. The thinking behind the appointment of more mature non-execs is that they have had a wide range of experience across their careers that they can bring to support, guide, govern and hold younger exec boards to account.
Plus, their contacts acquired over their careers are impressive and can be introduced into a growth company. But we also need to discuss relevance here.
Having a shorter tenure of appointments of truly independent non-exec board members, with unique and active experience and a younger profile will not only drive diversity of thinking but deliver improved agility, innovative outcomes and better-balanced boards.
With the rise of social media and truly global networks being built digitally, the appointment of the person with the traditional ‘book of contacts’ also needs review.
What’s the solution?
Balancing the boardroom is vital for future growth and transformation, not to mention baseline D&I initiatives for companies. Boardrooms need a mixture of ages, backgrounds, experiences, skills and neurodiversity to truly thrive.
Increasing numbers of women in board roles is to be applauded, but the skills and background companies are expecting in those roles needs to evolve. Mindsets need to change, recruiters need to be given the permission to produce non-stereotypical NED talent, rather than just preserving the status quo.
Looking for active talent, rather than those who are at the end of their careers will bring a better bland, diverse thinking and different futures.
We can help
As part of its value creation services, Lightbulb has a unique programme to assist investors and companies with advisory and solutions systems to get better balanced boards.
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