How to maintain the status quo in business when times are turbulent for all, regardless of size or sector, is a question many of us would do well to answer at present.
Jan Hughes, Director of Acorn's Executive Search, asks if the solution lies in creating diversity at the top for We Are The City.
Evidence continues to emerge worldwide that the presence of women on boards ultimately contributes to making a company more successful. But, while it’s heartening to see more women than ever before being appointed to the boards of some of our largest organisations here in the UK, there is clearly still more to be done – and perhaps not quickly enough bearing the current climate in mind. How to maintain the status quo in business when times are turbulent for all, regardless of size or sector, is a question many of us would do well to answer at present.
Could it be that the solution for all lies in the diversity of the board? Jan Hughes, Executive Search Director at leading UK recruiter Acorn Recruitment, looks at how maintaining a level playing field in the boardroom could well help achieve the same on the ‘shop floor’ at a time when the UK is dealing with unprecedented levels of change elsewhere.
It is a torrid time for many small businesses. With so much uncertainty politically and economically, avoiding any other difficulties has become essential to the survival of many SMEs across the UK. So, what of the ways in which it might just be possible to mitigate disaster?
Keeping a firm eye on ‘shop floor’ processes is certainly one way to help keep a tight ship running, but what about performance higher up the chain?
Here in the UK, research shows that the insolvency rate is 70% higher in SMEs which are run solely by men. Insolvency practitioners at KSA Group Limited studied 4 million UK SMEs to see if there was a gender bias on the board of those companies that became insolvent – and the stats certainly seem to be telling us so.
On an international scale, the Wall Street Journal has also reported that women now hold one in every five seats on corporate boards of America’s top companies and, according to the Harvard Business Review, diverse teams perform better than homogenous ones. A global analysis of 2,400 companies conducted by Credit Suisse also showed that organisations with at least one female board member yielded higher return on equity and higher net income growth than those that did not have any.
That’s certainly a tick in the box for board diversity.
Launched in 2016, the government-backed Hampton-Alexander Review meanwhile set FTSE 350 businesses a target of having 33% of all board and senior leadership positions held by women by the end of 2020. And the good news is, recent statistics show if future progress matches the same gains made in the last three years, then FTSE 100 companies are on track to meet that target.
But the shortfall in the present still very much exists and bridging that gap is perhaps more important than it has ever been – especially as an estimated additional £150billion stands to be generated as a result.
Many companies reporting the presence of their own gender pay gap earlier this year explained that it was in part due to insufficient numbers of women fulfilling senior roles, and/or a predominance of women in lower paid work. Ensuring more women are selected for senior roles is the only way to improve things.
For this to be achieved, support needs to be given at all career stages to ensure women have the same opportunities as men to progress, however. All too often females are left behind, as has been highlighted by this year’s gender gap data. But with the UK employment market constantly adapting to suit the needs of today’s workforce, opportunities including flexible working and job-sharing need to be made available at all levels to give people a real chance to progress.
From my own experience, being a voluntary board member sets you up with fantastic experience, opening doors to further opportunities and building confidence along the way, as well as offering the chance to make key business contacts.
Companies need to reach out to more women by making a visible commitment to diversity and backing it up with sustained action throughout the organisation. When considering new board members, for example, ensure there is a woman on every candidate slate, explicitly ask search firms for female candidates and always consider the right expertise, not just those with prior experience.
You never know, expanding our networks to include more women might just give us the boost we are all looking for at the present time.