Training and HR
The need to increase the number of women on boards both in Ireland and abroad continues to attract considerable comment and debate. In the UK, gender targets were introduced last year to address the lack of women on the boards of FTSE companies and on the face of it, seem to be working, albeit slowly
Change is also afoot in the EU, with Justice Commissioner, Viviane Reding, proposing legislation for Europe's listed companies to achieve a 40 per cent quota of women on their boards by 2020. The proposal is proving divisive within the European Commission, having already been met with staunch resistance from Britain and a number of other EU countries who argue that the issue should be left to national governments to address, a number of individual commissioners are also said to oppose it, including Ireland's Commissioner, Maire Geoghegan-Quinn.
As the debate in Europe rolls on, in Ireland, we are beginning to see a change in attitudes at board level, with directors now recognising that gender imbalance in the boardroom is an issue that must be addressed. For many, this may be regarded as too little too late, but the focus now should be on recognising the barriers and concentrating on finding a fair solution to the gender divide.
In recent research conducted by the Institute of Directors in Ireland (IoD) with its members; directors, both male and female, identified the dominant number of men at board level as a barrier to women accessing the boardroom. This is not surprising and many would argue that men have monopolised the boardroom for far too long.
Directors also identified a lack of support for women to move into board positions as a barrier and there is also a sense among directors, predominately men, that the pool of suitably qualified women for board positions is not large enough, a perception no doubt, that many suitably qualified women would fervently disagree with.
We are, however, slowly moving towards a consensus of opinion and an acknowledgement at least, of the barriers facing women in accessing boardroom positions. The next logical step must focus on how best to overcome these barriers and, ultimately, how to remove them.
The rationale for introducing mandatory quotas is clear, if examined solely in terms of achieving the objective of increasing the number of women seated around the boardroom table. But the issue of board diversity is more sophisticated and far more complex than simply making up the numbers. The need to increase the number of women on boards must be considered in the overall context of what is in the best interests of the board.
A well functioning board is one that recognises the benefits of diversity. A diverse board is more likely to ask the difficult questions, encourage constructive debate and challenge the executive. Such diversity brings a range of perspectives, experiences and expertise to discussions, helping to avoid a group-think mentality.
A diverse board is about much more than gender. The aforementioned IoD research found that 90 per cent of directors believe that diversity of skill-set, age and nationality is as important as gender to the functioning of a board.
Moreover, 86 per cent of women surveyed agree that new board appointments should be made based on the specific skills requirements of the board and not on the basis of gender alone.
This the key point.
If we are to avoid the mistakes of the past, if we are to ensure that women are not just appointed solely for their gender but on merit, if we are to formulate boards that are fit for purpose and fit for the future; then we must ensure that all board appointments are made based on the skills needs of the board and not on any other basis.
That being said, the issues faced by women in reaching board level must be resolved. The number of female directors in Ireland is growing and the IoD has seen a noticeable increase in the number of women joining the organisation in recent years, which is encouraging.
We must capitalise on this growing trend and focus our efforts on supporting, through training, mentoring and professional development, the participation of women in the boardroom and in senior executive roles. Women themselves have signalled an appetite for such an approach, with 60 per cent of those surveyed citing training and mentoring as a priority to get to board level.
If we are to avoid a token ‘tick the box' approach to appointing women to boards, then we must ensure that women are appointed on the basis of merit, on the basis of their skills and expertise and on the basis of their suitability for the board position in question.
There is no disputing that we need to increase the number of women on boards; however, the crux of the debate should be focusing on what is in the best interests of the board, first and foremost. By broadening the debate, we move away from restricting board diversity to a narrow gender agenda and concentrate instead on increasing the competency and effectiveness of boards.