‘Women on boards of banks ensures they’re more financially stable’, says IMF

Labour Party

The IMF has found that including women on the boards of banks ensures they are more financially stable. Its report, which you can read here, provides further compelling evidence why having women in senior positions and on company boards is good for business.

I find I defend my position regarding women on boards too frequently. The IMF- an institution which obviously musters high regard and respect- found in its report that: “the higher proportion of senior positions occupied by women, the greater the institutions ‘distance to distress’.” It went on to explain that a larger distance means the bank is more protected against shocks to earnings.

The report also found that the vast majority of banks (across the world) don’t have any senior women or women on their boards at all. It revealed less than 20% of directors on the boards of banks are women.

The lack of women in senior positions is not exclusive to the banking sector, indeed last month the Chartered Management Institute revealed respondents to its survey told of a 22% pay gap at management level. It equated the gap to women working an extra 57 days for free compared to their male counterparts.

Plans to force the top FTSE companies to be more transparent about their pay does help because it forces employers to consider how they remunerate staff and if they do so fairly.

Furthermore, an environment must be created so that capable women feel empowered enough to recognise the skills and expertise they bring to the table and feel able to robustly negotiate their pay.

Women remain an asset to business. Not least for the reasons identified in the IMF report. Yet some business leaders remain concerned that any period of time taken away from employment, for childrearing for example, in some way de-skills women. Yet the majority of women who take maternity leave are only away for a few months, during which period most organisations won’t go through a significant transformation. And even where they do, women are able to stay in touch with Keep in Touch days.

So I repeat the wise findings of the IMF report which indicate women are an asset to business: “Including women in senior positions ensures banks are more financially stable.”

Issue of women on boards still not addressed

Labour Party

The annual Davies report published in the last week reveals that female representation on company boards of the FTSE 100 has reached 23.5%, a figure which has almost doubled in the last four years.

In 2011 an appalling low 12.5% of women had board positions on the FTSE 100. Since then some work has been done to address this, the issue has been raised and debate ensued. However, the Tory-Lib Dem coalition was, unsurprisingly, reluctant to entertain the idea that legislation would help to redress the balance and certainly it would do so more quickly.

When Lord Davies was asked to examine the issue he recommended that the FTSE 100 should aim to have a minimum of 25% women on its boards by 2015. We are now in 2015 and this figure has not been achieved. A further 17 women need to be added to top positions before this figure is met.

However, perhaps the most interesting observation I can make is that on closer inspection of the 23.5% figure reveals that just 8.6% of executive directors are women which equates to just 24 women opposed to 255 men. The figures also reveal that there are 239 women non-executive directors and 601 men.

Although there aren’t any all-male boards in the FTSE 100, the Cranfield School of Management reveal that in the FTSE 250 there are still 23 all male boards.

Lord Davies has called the latest figure: “A remarkable rate of change.” On the face of it it is, but in reality the majority of women are non-exec directors, so really female representation at company level hasn’t changed significantly.

The only way to ensure women are properly represented at a senior level is to introduce mandatory quotas for top companies. There are very many credible and capable women in business but they are overlooked just because of their gender and this needs to be properly addressed.

Women on Company Boards

Labour Party


Both the Latvian Presidency of the EU and the European Commission have pledged to make progress in getting more women on the boards of major companies.

Speaking in the European Parliament yesterday evening, Vera Jourova, the European Commissioner with responsibility for gender equality, together with her counterpart from Latvia, made strong statements about the need for movement on the women on boards draft Directive which, having been passed by the European Parliament, has been stuck in the Council of Ministers since November 2013.

My contribution to the debate in the European Parliament is featured above.

For further information please click on this link to The Parliament Magazine – http://tinyurl.com/kcmkcgx


FTSE 100 on target to reach 25% of women on boards

Labour Party

Good news from the prestigious Cranfield School of Management. Its latest research found the percentage of women on boards has now reached 22.8% – close to the 25% target set by Lord Davies for 2015.

The report said that great progress has been made since the publication of Lord Davies’ report. They found the percentage of women on the boards of the FTSE 100 and FTSE 250 had increased by 82% and 124% respectively.

While this is good news, of course, we should approach these latest figures with caution. While the last of the all-male FTSE 100 companies appointed its first woman director earlier in the year, there are still 28 from the FTSE 250 which have all male boards. In addition, the report hasn’t outlined how many of the women from the FTSE 100 and 250 are non-executive directors. Some of them will be of course and this means there input could be limited depending on how the individual company views non-executive directors. They may have a seat at the table but will they have the opportunity to voice their opinions?

Just yesterday, for example, the Independent reported that FTSE 250 miner, Petra Diamonds, finally appointed a woman to its board.
But the South African accountant and businesswoman, Octavia Matloa, will join the diamond miner as an independent non-executive director sitting on its audit committee. How much power she will have to affect change is up for debate. I hope that her seat at the table isn’t just as a result of Vince Cable’s letter to 28 FTSE 250 companies who he told to improve the diversity of their boards after it was revealed 28 companies from the FTSE 250 had no women on them.

Despite the concerns the figures from Cranfield are promising. Furthermore, the academics predict that the FTSE 100 will hit the 25% target during 2015, with the FTSE 250 following in 2016. Just 24 more women are needed in the FTSE 100 and 150 across the FTSE 250 in order to reach the target of 25%.

However, mandatory targets will be far more effective and a figure of 50% could be achieved much quicker with enforceable goals.

Honeyball’s Weekly Round-Up

Labour Party

It was encouraging to hear that the numbers of women on corporate boards has crept up again. However, we are only talking of a minimal increase of one per cent, but at least it’s heading in the right direction and it’s happened less than a year since the last figures were published.

So, the percentage of women on corporate boards in the European Union now sits at 18.6%, up from 17.8% in 2013, the European Commission figures revealed.

Although an increase is encouraging, this remains far short of the 40% target set by the commission. In addition just over 3% of Europe’s biggest companies have a female CEO. This is a poor figure and needs improving quickly which is why I believe there is a real need for quotas for women sitting on company boards. Three per cent is woeful and shows that there is still so much to do in order to make real impact at a corporate level.

The Conservative peer Lord Ashcroft, revealed in his latest poll that Labour will win in Lib Dem target seats. He also said that Labour is on course for a comfortable majority. There will be an abundance of polls between now and the general election next year, but The Labour Party is right to remain cautious because despite the election being a mere eight months away we still have a lot of work to do; not least fighting off UKIP in their target seats. Indeed we mustn’t lose sight of the real threat they pose and we must be vigilant in dealing with this. To ignore them would be dangerous.

We only have to look across the water to France and the municipal elections to see how well UKIP could do here in the UK. The far-right Front National (FN) won its first seats in the upper chamber over the weekend elections, marking a shift in the political map of France.

Anne Penkith in The Guardian writes, “scored a historic victory in elections to the French senate on Sunday, winning its first ever seats in the upper chamber as the ruling Socialists and their left wing allies lost their majority to right wing parties.” If the FN are starting to gain seats in France there’s no reason to think UKIP couldn’t pose a similar threat in the UK.

Vince Cable is not trying hard enough to get more women on the boards of top companies

Labour Party

Vince Cable quietly launched what he called an ‘enhanced’code of conduct for executive search firms to support the appointment of more women on boards this week. It is targeted at the FTSE 350 and recognises those firms who have been most successful in the recruitment of women to the FTSE 350 boards.

The main problem with the idea of a voluntary code is that it isn’t taken seriously. This is evident by the very fact that the new code is actually a re-launch of an original one from 2011 to which just 70 firms signed up to. Whether the lack of support was due to poor marketing by the Department of Business Innovation and Skills or just a general dislike of anything which smacks of regulation, it illustrates that more decisive action is required.

That’s precisely why I advocate a move towards mandatory quotas. I wrote about the issue in 2012 for the New Statesman, and set out my argument then.

My New Statesman article pointed out that mandatory quotas have been successful in parts of Europe. Norway introduced legislation in 2003 when women represented just 9 per cent of executives at board level. Since then female representation has increased to 40 per cent, a great achievement in under a decade. Rather than collapsing, as many reactionary Britons may have expected, businesses in Norway have thrived as more women have taken up senior positions.

Women are just as capable as men. Women perform equally as well as men at university and in the early part of their careers. So they (we) cannot be any less capable when it comes to striving for the next move on the career ladder, namely a senior position. Since women are as capable, we must consider exactly why there is such a large disparity in terms of female representation in senior and executive positions, especially in the FTE 350, and take measures to rectify the position.

If we are to really tackle this disparity then a voluntary code simply won’t do. The business secretary must know this, and should therefore be taking much stronger action.


Speaking to ITV News about women on boards

Labour Party

This week I appeared on ITV’s lunchtime news, alongside Jacey Graham and Joanna Fielding, to discuss the issue of women on boards. This followed the release of the latest figures on the issue, which showed that at present 20.7% of board members are women. The numbers prompted Denise Wilson, chief executive of the report’s steering group, to voice fears that the UK will not hit the 25% target for 2015 set by Lord Davies. She advocated all-women shortlists for some board positions – an idea first put forwards by Charlotte Sweeney. The UK must continue to work hard to keep pace with the rest of Europe, and if we begin to fall back then I think we should not be afraid of more proactive measures.

You can watch the item again below:

Honeyball’s Weekly Round-Up

Labour Party

The Conservatives came under fire this week for only hiring ‘yes men’, after Baroness Sally Morgan, former Labour advisor, was sacked as Chair of the schools watchdog Ofsted.

While Education Secretary Michael Gove insisted the decision was “good corporate practice”, claiming there was no political motive, figures ranging from former head of Ofsted Sir David Bell to the Lib Dems’ David Laws were quick to accuse the government of working to an agenda. Labour’s Tristram Hunt said the Department for Education was playing “political games” and others suggested the government were ‘battening down the hatches’ already, as pressure begins to build in the run-up to the 2015 election.

The Ofsted Chair role is not the first high profile post in which a non-Tory has been removed. The Arts Council, National Heritage and the Charity Commission have all, of late, seen Conservative loyalists parachuted into the top jobs. Morgan herself said there was “absolutely a pattern” to her dismissal.

With nearly half of Sixth Form heads claiming they have had to discontinue core A Level courses because of £100 million cuts by the Department for Education, it is little surprise Gove wants to short-circuit the debate. His decision is a mark of how the Tories have changed – or, rather, shown their true colours – since taking office in 2010. Cameron’s early attempts to detoxify his party and adopt a more conciliatory and consensual approach – Morgan was, in fact, a Tory appointment – have been exposed as a sham. In almost every policy area the Conservatives have fallen back on hard-right policies, designed to placate their backbenchers rather than serve the electorate.

Good leadership involved having a range of genuinely independent voices around the top table, not just hiring members of the converted to preach to. Gove’s choice of personnel for the Chair of Ofsted is just the latest signal that the Conservatives are less interested in reasoning with those who disagree with them than they are in appeasing prejudices within their own ranks. Gove suggested on yesterday’s Andrew Marr show that by sacking Sally Morgan he was “refreshing” his team; I’d argue that it’s the government which, after the hubris of 3 years in office, needs refreshing. Getting rid of dissenting voices is not the way of doing this.

Speaking of diversity in decision-making, Lloyds Banking Group this week took the radical step of setting a 40% target for the number of women in Senior Management positions by 2020. The figure for the company’s 5,000 senior managers is currently around 28%. The announcement – which is expected to be formally enshrined as a target by CEO Antonio Horta-Osorio – at a speech next week, will make Lloyds the first FTSE 100 Company to set such a goal. Fiona Cannon, the organisation’s head of inclusion said the move made good business sense, pointing out that to be successful the firm’s top brass had to reflect its “incredibly diverse” customer base.

I am delighted that companies are starting to recognise the advantages of pluralism. Whilst getting women on boards rightly receives a lot of attention as a means of driving the direction of travel and setting a benchmark, it is vital that progress is not limited to non-exec positions. To make meaningful progress on the issue of workplace equality, we need women to be rising up companies at all levels, so that there is a steady progression of female candidates arriving in senior posts and knocking on the boardroom door.

Company cultures holding women back

Labour Party

Female executives are ambitious and sure of their own abilities to become top managers, but they are much less confident that their companies’ cultures can support their rise.

This is the main conclusion of the latest McKinsey Global Survey of male and female executives.

Another conclusion is that male colleagues do not appreciate the difficulties women face. Male executives are much more likely than women to disagree that female executives face more difficulties in reaching top management – and men see less value in the diversity initiatives that can correct the gender imbalance.

On an individual level female executives report that their career ambitions are just as high as those of their male peers.

And they are ready to do what it takes to achieve their ambitions. Two-thirds of both male and female executives say they are willing to sacrifice part of their personal lives to reach a top management position.

Yet female executives are much less certain they will reach the top – 69% of female executives compared with 83% of their male peers.

The survey identified two sets of factors that can drive or inhibit career success: those to do with personal actions, desires and initiative to advance, and those that reflect the organisational environment in which executives work.

The survey revealed that cultural factors weigh more than twice as much as individual factors on women’s confidence to reach top management.  Company cultures can either build or undermine the confidence executives need to get to the top.

Finally, the survey’s results confirm that there is no single way to make change happen and companies need a whole raft of measures. But change starts at the top. And there is a need to engage male executives, given that they are more likely to think that too many measures that support women are unfair to men. This belief about unfairness is especially common among men who are less aware of the challenges women face.

The survey recommends including more men as mentors and sponsors, and that companies need to create a corporate culture that welcomes various leadership styles.

British and European companies need to take careful notice of this latest research from the highly respected McKinsey company. Unless and until women get a fair deal business enterprises of all sizes will continue to lose out by not making use of all the available energy and talent.

Honeyball’s Weekly Round-Up

Labour Party

A very warm welcome to my first round-up of 2014. I hope everyone reading this had a peaceful festive period.

With the European Elections in May, this will be a year when Britain’s relationship with Europe goes under the microscope. The hysteria that was allowed to build before the predicted ‘influx’ of Romanian and Bulgarian workers after January 1st – and the thumping anti-climax when their arrival proved more a trickle than a tide – illustrates what a politicised issue Europe has become.

Rather than obsessing about migration we should look at the other challenges Britain and the EU face in 2014. The year began with a desperately sad Prince’s Trust report on youth unemployment. Their annual Youth Index showed that 40% of unemployed 16-25 year-olds now experience mental illness. It said 25% of those who were long-term unemployed tookor had taken anti-depressants – compared to 11% of those with jobs – and that nearly one in ten young people feel they have nothing to live for.

The figures led professionals to deem the problem a public health crisis. With around half of the 900,000 jobless young people in Britain long-term unemployed – and problems like self-harm and drug-use prevalent – The Royal Society for Public Health’s Shirley Cramer said it was “essential” that the issue moved up the agenda.

It is little wonder young people in Britain feel hopeless. As well as failing to address issues like low wages, unpaid internships and the cost of living, the Tory government have abolished EMA, trebled tuition fees and sought to remove benefits for under-25s. As David Cameron’s conference speech showed, their approach is to scapegoat rather than support youngsters.

Youth unemployment is not the result of idleness, but of too few opportunities. It is an area where we need more not less collaboration with Europe.

2013 saw the European Parliament vote through recommendations that member states prioritise the issue. And the European Commission’s Youth Guarantee Scheme called on domestic governments to provide jobs or further training for all young people within four months of leaving school. These measures are helping to create a Europe-wide consensus on youth unemployment, which looks to support member states and share good practice. They illustrate the value of cooperating with our neighbours rather than demonising them. Instead of being sidetracked by diversionary myths about EU migrants, we should focus on the real issues, and work with the rest of Europe to prevent a lost generation.

On a more positive note, it was good to see Japan this week announce a 2020 target of over 30% representation for women on boards. Prime Minister Shinzo Abe set out the requirements on Thursday, calling women the country’s “most underused resource”. At present women hold just 1.6% of executive positions, and Japan ranks dismally compared to other developed countries. Some claim the economic boost created by having more women at the top could be as much as 15%.

Japan should be congratulated for setting such bold targets. Despite currently sitting a long way behind the UK for the number of women on boards, they are clearly intent on drawing level. Abe is no bleeding heart liberal, but he recognises the business case for diversity. Rather than being content with Lord Davies’ 30% target for 2020, the UK should be as ambitious for itself as Japan obviously is, and endorse Viviane Reding’s 40% target. I hope that by this time next year we will have done so.