Tag Archives: Lord Davies

Female Executive Directors Preferred

boardroom heelsWhen it comes to organisational health, judged by financial and efficiency metrics, the more women at the top, the better the financial returns says McKinsey & Company.

Put another way, it’s not just what you say and do but how well you do it.

Yes a male CEO can justifiably say ‘we want to employ more female car sales staff’ but the reason there are so few might be because the business isn’t perceived to be a female friendly employer from the Boardroom down.

Certainly that’s true of the UK motor industry, which is the big picture in too many female minds – and I’m talking about women in a broad context; seen as Board member recruits, staff AND customers.

So whilst it’s encouraging to hear that Lord Davies is being listened to in UK Boardrooms we’re a long way short of making the impact we need to en route to a new target of 33% of women board members at FTSE 350 firms by 2020.

That’s too far away and well short of the 50% I want to see in my working lifetime.

The Executive Gender Elastoplast

All too often however, a female Non Executive Director (NED) is the ‘tick the box must have’ Elastoplast solution. This is because an unconvinced CEO can turn to an executive recruitment agency, say ‘we need one or more female NEDs’ and they’ll supply them. This is when a CEO can also think (to himself) – ‘if she doesn’t work out/fit in, we’ve only got her for three years then I can line up another one.’

Now I’m making a female NED appointment sound easy but I’m assuming NEDs, regardless of gender, with the requisite corporate skills, such as HR, governance, legal or secretarial. Fortunately there are plenty of serial NEDs (male and female) who offer such skills and whilst they might be experts at reading Board Minutes and Balance Sheets they are not the best judges of the culture of a business. That can only truly be felt from working on a full time basis within it. And for some time within it, to hear and be trusted with honest staff opinion.

So my point here is that whilst female NEDs will tick the diversity box (and are to be welcomed in the absence of others at the top) they are not as valuable, as I see it, as Executive Directors. Female Executive Directors need to be sponsored and groomed from within, then given a mandate to change a business from a mainly masculine to a female friendly employer (where appropriate – I am writing with the motor industry in mind).

Corporate nirvana, as I see it, is when a female takes a strategic position within the Board, usually as CEO. This is when a female business leader steers a naturally female friendly business using her personal perspective and experience, influencing all aspects of the business whilst accurately predicting and addressing women’s needs and expectations.

Of course many male-led businesses do this already, such as fashion and beauty businesses where the Boards are often full of female, but businesses in my industry, the UK motor industry, seem woefully slow to understand why they might need ANY let alone MORE female Directors.

So here are some good reasons guys – and you really need female Executive Directors to transform overly masculine cultures from within.

More female Executive Board Members needed

Female Board Directors are needed in the UK motor industry because…

+ They are missing from most motor industry Boardrooms
+ They show aspiring female employees a career path
+ They act as role models for ambitious graduate/apprentice recruits
+ Women are half the executive talent out there (but need encouraging to apply)
+ They represent the gender that influences the majority of purchases (80% of cars/aftersales)
+ Women bring consensus and a more collaborative style of working
+ Women add ethical and environmental values (that may well have made a REAL difference in VW’s 100% male Boardroom)

windscreenviewSome time ago, working in a consultant capacity, in my own right, I set out to measure the UK automotive industry in terms of the numbers of female Board members and executive positions.

My intention was not to name and shame but to publish a useful benchmark to influence behaviour and raise gender matters in this area.

Sadly I was unable to obtain the Board composition details I needed re: automotive manufacturers and/or dealership groups operating in the UK so I look forward to this previously ‘secret’ information becoming public when we can all see gender composition re Executive and NED Board appointments in this industry.

Needless to say, if our FTSE goals are now to achieve 35% women on Boards by 2020, it’d be a lot quicker to simply introduce female quotas. Which is my preferred strategy now Lord Davies – one I never thought I’d EVER support but do now after waiting for too long for gender and diversity to reach the top of big businesses in the automotive industry.

FOXY

@FOXY

Steph Savill Limited

Does gender balance matter?

Gender balance in the UK motor industryGiven the choice I prefer to call a spade a spade but when you are talking about equality and gender differences in a business context ‘political correctness’ will often take the lead, even when the business case is clear. Take the new and increasingly used phrase ‘gender balance’ for example…

Don’t we all know that a business with a happy male and female workforce is a healthier one?

We are now told that it is a wealthier one too in terms of profits.

As you might expect, the EU has something to say about all this. In a move to influence businesses that aren’t employing enough women in senior roles (for economic reasons), MEPS are calling for an increase in female representation at management level. From a challenging 30% by 2015 to 40% by 2020. This is a welcome initiative says EU Justice Commissioner Viviane Reding.

The gender balance business case

Apparently ‘gender balance’ (ie where there is a fair balance of men and women) in top positions contributes to improved business performance, competitiveness and economic gains. A report by McKinsey found that gender-balanced companies have a 56% higher operating profit compared to male-only companies. This is supported by Ernst & Young research. They looked at the 290 largest publicly-listed companies and found that the earnings at companies with at least one woman on the board were significantly higher than in those that had no female board member.

It seems that a lack of women in top business jobs can therefore hamper a company’s performance, an industry in turn, then the country and now, we are told, Europe’s competitiveness and economic growth. Which is why several EU member states – notably Belgium, France, Italy, the Netherlands and Spain – have started to address the situation by adopting legislation that introduces gender quotas for company boards. And why others including Denmark, Finland, Greece, Austria and Slovenia, have adopted rules on gender balance for the boards of state-owned companies.

But who would want to be the token female to make up the quota? Much better to set targets and report (compare and contrast) on performance levels by industry I believe.

Gender balance in the UK

The UK government appointed Lord Davies to lead a review into the reasons why there aren’t more women on UK company boards. In 2011 he recommended that UK listed companies in the FTSE 100 should aim for a minimum of 25% female board members by 2015.

He suggested sensible targets for 2013 and 2015 to ensure that more talented women can get into the top jobs in UK companies.

On the basis of these recommendations the government is now encouraging all FTSE 350 companies to set out the percentage of women they aim to have on their boards in 2013 and by 2015.

Just for the record women now make up 14% of FTSE 100 directors, up from 12.5 % in 2010. There’s a long way to go.

Gender balance in the UK motor industry

The UK motor industry is a case in point. How wonderful it would be if Lord Davies’ recommendations would be adopted and exceeded here. Very few of the leading dealership groups have one let alone more than one female Executive Director on the Board and we certainly don’t want to see a spread of a few professional Non Executive Directors tolerated simply to tick the ‘gender balance’ token book at Board level. NEDs may have the right experience and may say the right thing but, regardless of gender, they cannot ‘feel’ a Group culture in the way that employees can, nor can they influence it from within.

Interestingly when I speak to leading motor group CEOs they invariably tell me they are a female friendly business, usually justifying this because they employ female managers. When I then talk to these female managers (in strict confidence) very few agree that the business is genuinely female friendly. I am left to deduce that these (always feisty) females have got where they are because they are not just the best ‘man’ for the job but also because they have been prepared to fight to prove it throughout their careers. Which few women are, given a more female friendly industry choice…
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The solution may be the ‘coming soon’ Female Friendly Approved website and service. We will be offering consultancy advice, a holistic FEMALE FRIENDLY audit, training programme and an accreditation programme for motor industry groups that genuinely want to
+ recruit and retain more females
+ deliver female friendly service levels for their customers in future (and delighting men in the process).

Providing the industry and its individual businesses have a strategic commitment to getting service levels right for female staff and customers in future, the necessary steps to change an all-male business culture can then begin in earnest. This will involve a training programme which should start at the very top of each and every organisation, recognising that not all women want to compete with men on male terms.

The opportunity cost for the motor industry is a high one at present. It is losing the best qualified (female) talent to other more female friendly industries simply because of its male-oriented culture and image. This is illustrated by Cranfield School of Management’s recent research findings that many more women than men report they have dealt with gender-based barriers by leaving employers or changing careers.

There is an urgent need to address the lacklustre male-dominated image of the motor industry so that it is seen to welcome women as employees for their natural talents; not just to promote the determined few who are willing to outbloke men and become too like them (in my opinion) as they move on up the ladder.

FOXY

Why more women make business sense

Why aren’t there more female board members in the UK motor industry? Because if there were, businesses would be more profitable.

Starting with an example of best practice, let’s pay a tribute to Rolls Royce and the bailed-out Lloyds Banking Group who are aiming to increase female board membership to 23%.

Compared to many of the Top 10 dealership groups and other car manufacturers, for example, where there are very few female board members if any.

Clearly those with a traditional male culture don’t realise that women on boards can have a positive impact on their bottom line? Such is the evidence in Lord Davies ‘Women on Boards’ report (2011) which states that “Companies with more women on their boards tended to outperform their rivals with a 42% higher return in sales, 66% higher return on invested capital and 53% higher return on equity.”

Of course it isn’t just the motor industry that is slow to realise this; just 12.5% of FTSE 100 Board members are women, one in five have no women in their boardrooms and this drops to an average of 7.8% for all FTSE 250 companies.

Nonetheless Lord Davies is calling for UK companies to commit to an ambitious target of 25% female board membership by 2015. I’d love to think the UK motor industry would commit to this, knowing the problems it has recruiting young women into automotive careers as well as the poor image it has in so many female customer minds.

A couple of clues were identified during research carried out by Cranfield University. They found that there is a lack of flexibility around work/life balance (to do with families in particular) and that traditional male cultural environments, the old boys network and a lack of networking opportunities for women are major deterrents for qualified females who might otherwise make good board members.

I identify with these issues in the motor industry. But I do not agree with one of the suggested solutions, which is to provide more training opportunities for women. May I suggest that it is the men that are more in need of training about women if women are to be helped to contribute their talents and to flourish in this industry.

I can understand why female board members are good for the bottom line and, with the right female board members empowered to encourage others in their wake, I think it is possible to move quite quickly from a male cultural environment towards a healthier gender diverse workplace. Providing the business wants to adopt a more female friendly agenda in future that is.

FOXY
Automotive Careers Champion

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