A new report was released on Monday by the Equality and Human Rights Commission (EHRC) which has reported that the appointment of women to FTSE 350 companies in non-executive director roles is being held back by selection processes which favour candidates with similar characteristics to existing male-dominated board members.
The report reveals that executive search firms have introduced a voluntary code of conduct and have had some success at getting more women on long lists. However, when it comes to short-listing and appointing, successful candidates tend to be those who are perceived as “fitting in” with the values, norms and behaviours of existing board members, who are largely men.
The report suggests that search firms are beginning to challenge chairmen and nomination committees when defining briefs, including giving more weight to underlying abilities than their “fit” with existing board members. The research shows that selecting candidates on the basis of their “fit” and previous board experience disadvantages women who have had fewer opportunities to gain previous board experience.
To stop this self-perpetuating cycle, the report makes the following recommendations:
• As intermediaries in the executive labour market, executive search firms need to set clear definitions as to what is sought from board candidates, beyond their experience.
• Executive search firms, chairmen and nomination committees need to review the interview process to make it more transparent, rigorous and professional.
• Executive search firms need to invest more time into developing relationships with women in the pipeline who could become executive or non-executive directors later in their careers.
• Executive search firms need to carry out regular reviews of the effectiveness of the voluntary code of conduct.
Baroness Prosser, deputy chair of the Equality and Human Rights Commission, quite neatly sums up the current conundrum:
“Research shows that diverse boards produce better performance. Many companies recognise this. We commissioned this report to support their efforts to improve the representation of women at board level. However, the often subjective way of making appointments ends up replicating existing boards rather than bringing in talented women who could bring real benefits to individual company performance and ultimately help Britain’s economic recovery.”