UK News

Glass ceilings, glass walls and the boardroom

October 2012

Recent research has suggested that the idea of a glass ceiling limiting women's progression to senior levels in companies is now outdated - only to be replaced by multiple barriers.

This finding arose from an Ernst and Young survey of 1,000 working women in the UK and identified the multiple barriers of age, experience and qualifications, motherhood and the absence of role models. We discuss the current situation and the contentious issue of quotas of women on boards of directors below.

Gender Equality legislation has now been in force in the UK for nearly 40 years yet the statistics still show very low representation of women in senior positions in companies. As highlighted in Lord Davies' report last year "Women on Boards", only 12.5% of FTSE 100 companies' board members were women, the percentage being even lower - 7.8% - in the FTSE 250. His view is that "some company chairmen are dinosaurs who just don't get equality". So is it simple institutional sexism or are other factors in play?

As Bruce Peltier notes in "Coaching Women in Business", corporate architecture has been designed by men and organisational culture tends to reflect a male point of view. This presents women with some difficult decisions – should I behave more like a man to succeed? How do I manage to have children and still progress? Am I letting my children down if I focus on pursuing my career objectives?

These questions are often perceived to be less problematic in areas where women have become clustered in business, such as HR and marketing - the so called "pink collar" jobs. However, this tends to produce "glass walls", so that breadth of experience needed to progress to the highest levels in an organisation – for example, in operations or IT (more male dominated areas) - is less easily available to women.

This is an area that has received much attention recently. October saw the demise of a proposal by Viviane Reding, the EU commissioner for justice, fundamental rights and citizenship, to impose a 40% quota of women on company boards across the member states. Opposition to the measure - led by the UK - came from commissioners from 10 member states, including four women. They expressed preference for policy initiatives at a national level being given an opportunity first.

This reflects similar views expressed at the recent UK Women's Business Forum, where a poll of 600 delegates from British business showed 82% of men believed quotas will not work. Perhaps more revealingly 73% of women shared the same view. The Forum's Chief Executive, Heather Jackson, said that quotas provide only "a sticking plaster against the leaking pipeline of talent that is the root cause of gender imbalance on boards."

That leaking pipeline was starkly demonstrated only last week in a survey of the top 100 law firms conducted by The Lawyer magazine showing that women comprised only 9.4% of the equity partners of those firms. This is against an entry rate which is at least 50:50 women to men and has been at that rate for a number of years.

If imposed quotas seem unlikely, at least in the short term, what steps can be taken to improve the position?

The government published regulations in mid-October 2012 requiring quoted companies to publish gender (im)balance information. This follows a recommendation from Lord Davies' report and will require all publicly quoted companies to publish information in their strategic report showing the gender (im)balance among directors, managers and employees.

It remains to be seen what effect this sort of policy initiative will have. If it does not improve the situation then attention may return to quotas. The proponents of this may point to Lord Davies' recommendation taken up in the voluntary code of conduct for executive search firms. Under this, amongst other things, long lists presented by headhunters on positions should make up at least 30% women. Since this was implemented the female membership of FTSE 100 boards has increased from 12.5% to 16.7% and in FTSE 250 companies from 7.8% to 10.9%. It is clear that headhunters and the recruitment industry have a key role to play in changing the status quo.

BIS statistics show that, since March 2012, 44% of new director appointments in the FTSE 100 have been women and 40% in the FTSE 250. That is not the full story, however there are still 11 FTSE companies that have no women board members and only two that have a female CEO.

Is the glass beginning to crack?

Resources

Ernst and Young report

Lord Davies "Women on Boards" report

Bruce Peltier – The Psychology of Executive Coaching, Chapter 12.

The Lawyer

For further information or to discuss the issues raised, please contact David Widdowson, Guy Abbiss or Emma Clark on +44 (0)20 3051 5711.