State must get on board with gender balance
The bank was run by two women based on what they describe as their ‘five feminine values’: be aware of the risks you are taking; tell people the downsides, as well as the upsides, of their investments; emotional due diligence is just as important as financial due diligence; profits should be based upon positive social and economic principles. These appear painfully obvious today but at the peak of the economic boom they were not applied in almost any other financial institution in the world.
Too often the debate about women on boards centres on what extra work women need to do to enter the boardroom. The global excitement about Sheryl Sandberg’s new book Lean In makes some welcome contribution to the debate. But in the midst of asking questions about women’s behaviour we can lose sight of the other barriers which impede access to the boardroom, such as unfriendly work hours, inappropriate work culture and lack of access to the ‘right’ networks.
The National Women’s Council of Ireland (NWCI) has a long track record of tackling these structural barriers. This week the NWCI will bring together business women and thinkers to make a final wake-up call to businesses in Ireland. For us the burning question is not ‘how do we get more women into the boardroom?’ but rather ‘why are so many businesses failing to take advantage of women’s potential contribution?’
The management consultancy firm McKinsey & Co draws a clear link between the appointment of women to boardroom positions with improved governance, and even profitability. As a bonus they point out it is good for social equality too.
Given that the primary legal duty of a company is to maximise profits for its shareholders it seems remarkable that so many Irish companies are passing up this chance to improve their businesses. Only 9% of board positions in the Iseq20 are held by women. State boards fare better, with an average of 34% of board positions filled by women. But this number hides a deep imbalance. Research by the NWCI shows that boards with a remit in family and children’s affairs tend to be dominated by women while the boards with economic clout are mostly populated by men. A re-balancing is required in both.
The EU, during the Irish presidency, is examining a directive by Commissioner Viviane Reding on quotas for companies listed at the top of the stock exchange in each country. The proposal is that by 2020 40% of all board positions must be held by women. Each member state will then decide how to implement this target. The risk is that governments will take a lowest common denominator approach, which risks not achieving the desired target.
Five EU member states (France, Belgium, Italy, the Netherlands and Spain) have already adopted legal quotas. In Britain the Davies report led to the implementation of a public and peer review system which, initially at least, led to significant progress. Although Ireland ranks 26th out of 34 countries (between Egypt and India) in recent OECD ratings the Government has not yet acted to improve our position.
We think the Government should take three initial steps towards better gender balance on boards. Firstly, develop a centralised, open and transparent process for the appointment of all state board positions. Secondly, use the Irish presidency to seek the most robust possible EU-wide agreement on Viviane Reding’s initiative. Thirdly, appoint an independent businessperson of high-repute to examine all available options to increase the number of women on Irish boards.
Without swift and effective action the lessons of the economic crisis risk being lost and forgotten. And the consequence is that we could so easily repeat the mistakes of the past.
* Orla O’Connor is the director of the National Women’s Council of Ireland. The council will host a meeting on women on boards on Apr 25. Contact reception@nwci.ie
