This year saw the rise of the hit film, Suffragette and with it the nation was drawn to some of today’s inequalities against women, if only for a short while. Many token acknowledgments have been made this year to women’s equality and not least the idea of more women on boards. Lord Davies has upped his game from 25% to 33%, but aside from the fact that it still does not equal 50%, many of the females on boards are only Non Executive Directors (NEDs). However, so many women are convinced that progress is being made.
According to the most recent survey, MSCI’s All Country World Index (ACWI), the industry’s accepted gauge of global stock market activity, as of 9th September this year, strong female leadership has generated a return on equity of 10.1% per year versus 7.4% for those without it.
Amazingly, it seems you need just three women! Three women in the boardroom is the tipping point where women’s voices are heard. More diverse compositions tended to be more innovative and make better decisions.
We need more women! The former president of the Law Society, Lucy Scott-Moncrieff, said that if appointments were made on merit, there are many men who would never have seen the paintings in the boardroom.
Women in the boardroom make companies better. Shareholder returns are higher, corruption and fraud rates are lower, and firms are more progressive when females have seats at the top table.
The top five countries in terms of percentage of female representation include Norway with 35.5% to Belgium with 23.4%. Yet none of these figures really approach an equal share. Having women on board can decrease your company’s chances of going bankrupt. A study done by Leeds University Business School found that having just one woman on your board could cut your risk of bankruptcy by 20% and by having two or three members lowers your chances even more.
MSCI Inc., a provider of investment decision support tools, looked at the presence of women on the boards of thousands of companies and their corresponding propensity for scandals and tensions with shareholders. The results showed ‘a clear pattern between having higher than mandated percentages of women on boards and fewer governance-related controversies.’
It only takes 3! Get a woman on board
Currently, just under 25% of boardroom seats are held by women in the UK. But higher up the power structure, the number dwindles. The FTSE100 is home to only five female chief executives and 13 chief financial officers. The CEOs are Kingfisher’s Veronique Laury, Severn Trent’s Liv Garfield, Moya Greene of Royal Mail, Alison Cooper at Imperial Tobacco and easyJet’s Carolyn McCall. The number will increase when Alison Brittain joins Whitbread as CEO next spring.
Don’t underestimate the CEOs. When taken in conjunction with other news stories, we need to recognise that women are one of the biggest threats in the UK, even bigger the growing obesity problem.
As Baroness Helena Kennedy said “Eve was Framed”.
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