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Women On Boards
This week sees the first anniversary following Lord Davies’ report on board diversity, and we can see substantive progress in the overall diversity of our largest companies – those in the FTSE 100. The year has seen about 100 women appointed to FTSE boards in those 12 months, a good proportion of whom have no prior experience of serving on a public company board. Of the 11 (down from 21) companies in the FTSE 100 that still have no woman on board, not one is in a consumer-facing sector, and I find that significant. Retailers, fashion and luxury and consumer companies are leading the charge towards more balanced boards and are providing lessons that other sectors could learn from.
Jane Scott, founder and chief executive of the Professional Boards Forum and BoardWatch (to whom I am indebted for providing up-to-the-minute statistics) is fond, like me, of marking out individuals for praise. The march towards more balanced management teams is invariably led from the front. One of Jane Scott’s heroes is Gareth Davies, former chief executive of Imperial Tobacco. He now chairs construction materials company Wolseley (where 22 per cent of the board is female) and bookmaker William Hill (also 22 per cent). His personal recommendation was instrumental in the appointment of his successor at Imperial, too. Alison Cooper is one of just four female chief executives to head up a FTSE 100 company: the others are Dame Marjorie Scardino (Pearson), Angela Ahrendts (Burberry) and Cynthia Carroll (Anglo- American).
I would cite Archie Norman, the legendary former chief executive of Asda, who spawned a whole generation of FTSE 100 chief executives including Richard Baker (one-time CEO of Asda and Alliance Boots), Justin King (CEO of Sainsbury’s) and Allan Leighton (former CEO of Asda and former Chairman of the Royal Mail). Justin King was just 42 when he was appointed CEO of Sainsbury’s and Richard Baker just 40 when he became CEO of Alliance Boots, then the youngest ever CEO of a FTSE 100 company. None of them was afraid to promote and hire women, perhaps helped by their age.
There are, in my opinion, more heroes in the UK’s battle for more balanced boards, among our retailers and consumer goods companies than in any other sector. Perhaps because these fields are fast-moving, they attract a more modern, young-in-approach person, but it isn’t just age. Two of the present four women who sit on the M&S board were appointed by then executive chairman, Sir Stuart Rose (now in his sixties), long before Lord Davies put pen to paper.
Now Robert Swannell and Marc Bolland are continuing the fine work. Laura Wade- Gery’s appointment as board director in charge of e-commerce was inspired, as was the non-executive appointment of Martha Lane Fox. Retailers have to reinvent their businesses to take advantage of the digital universe we all live in or face a Jurassic fate. M&S have hired two of the UK’s foremost thinkers in this space who just happen to be women.
But these are not just isolated cases. Back to the numbers, topping the list of all FTSE 350 companies we can see drinks giant Diageo, where 44 per cent of the board is female. Companies with 25 per cent or more women on their boards include Burberry (38 per cent), Marks & Spencer (29 per cent), Morrisons (29 per cent), BT, Whitbread, British American Tobacco, Centrica, InterContinental Hotels, Standard Life and Unilever. Sainsbury’s, Tesco, Aviva, Imperial Tobacco, SABMiller, Kingfisher, Shire, HSBC, Reckitt Benckiser and Royal Bank of Scotland all have boards with at least two women on them. This is where diversity can be seen in action, and other sectors have a lot to learn from them.
In a smart move, John Lewis has just announced the appointment of Helen Weir as finance director of the partnership. Weir, who quit Lloyds last year when she failed to get the chief executive role, isn’t just a high-IQ number cruncher with a Maths degree from Oxford and an MBA from Stanford. From her first role as a graduate trainee with Unilever, her career has been in consumer companies: B&Q, then its parent Kingfisher and finally Lloyds TSB first as finance director and then heading up the retail banking division. Had she selected a different sector – mining for instance – would her talents have been spotted and nurtured?
Ursula Burns, the world’s most senior black chief executive, talks eloquently about Xerox having always accepted her for who she was. This is from an interview she gave late last year to the Financial Times: “When I walked in the door as an intern, I was fairly outspoken, (with) strong views and opinions – sometimes wrong and strong…Today, I still speak as fast as hell and have very distinct views about how the world should go and grow. I don’t play golf. I like certain kinds of music. I dress a certain way.” No-one tried to make her into their idea of a fast-track male executive. “No-one ever said, ‘You are just too urban, too black or too female’. There was never a conversation about it.” Far-thinking companies are adept at making talent feel at home, whatever its gender or colour, and less-progressive firms should learn the lesson.
Executive search firms like ours are now increasingly being directed to offer balanced shortlists. We have recently been awarded a board assignment with a new client only having been able to show that our database of candidates is genuinely diverse. In the case of MBS Group, perhaps because we have been finding senior people in fashion and luxury, retail and consumer, for some decades now, our database is almost exactly 50:50.
Working practices, revolutionised by technology, now make it much easier for women to meet the 24/7, always-on, demands of the most senior roles. No longer do you have to be in a physical office to be working: you are plugged into real-time sales data, email and Skype from any number of mobile devices wherever you are. This flexibility has especially benefitted women, who still tend to do the lion’s share of family and household management. These days, the boundaries between work and home are much more blurred. Who, today, takes a two-week holiday and doesn’t check their email? It doesn’t happen. On the other hand, if you take an hour out of the office to go to your child’s parents’ evening, few will bat an eyelid. It is the way we work now.
It is not surprising that the greatest progress over the last year has been in non- executive appointments. Here, the need for very specific experience and a particular track record, is much less of an issue. A broad range of skills and experience is relevant to the non-executive role, and the pool of women with those skills is much wider and deeper. So far, we haven’t seen the increase in the numbers of women non-execs translating into increases in women executive numbers, but that may still come.
Anecdotally I know of several female non-executive board directors who ensure they ask about progress in promoting women through the management ranks and see this as part of their role.
According to the Professional Boards Forum Boardwatch, today 6.5 per cent of FTSE executive directors and 14.9 per cent of non-executive directors are women. Of FTSE 250 companies, women occupy 4.6 per cent of executive directorships and 9.4 per cent of non-executive posts. Since the report was published, 27 per cent of all board appointments have been women, numerically amounting to about 100, and the number of FTSE 100 companies with all-male boards has dropped from 21 to 11. There is no doubt that the UK’s biggest companies have more diverse boards than a year ago but the number of women in executive board posts in the FTSE 350 has actually fallen slightly in the last year.
Diversity further down the FTSE 350 is still a challenge: nearly half of all FTSE 250 companies still have no female director. Even among retailers and consumer companies, there are significant numbers of all-male boards or boards with just one female non-executive. Exceptions – so they belong with the heroes below – are Betfair, EasyJet, Go-Ahead Group, Ladbrokes, Marston’s, Stagecoach, JD Wetherspoon and William Hill – all of which have at least two women on their boards.
The FTSE 100 isn’t quite on track to meet Lord Davies’ targets, but it is a healthier place than a year ago. There is an increasing number of far-sighted chairmen determined to change the male-dominant cultures of the companies they helm, and with that there have been some imaginative appointments. Retail and consumer companies are leading the way. As talented women see others take high-profile leadership positions, there will be an increasing flow of women who believe there is no boardroom closed to them, and that will be real progress.
Category: Special Report
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