Walking the Walk

An equal world is an enabled world. That’s the message of this International Women’s Day, and its campaign theme, #EachforEqual.

This year’s campaign aims to encourage people to consider how individually we are all responsible for our own thoughts and actions – all day, every day. We must realise that we have the power to actively choose to challenge stereotypes, says the campaign, to fight bias, broaden perceptions, improve situations and celebrate women's achievements. Collectively, each one of us can help create a gender equal world.

As governance professionals, equality is a central business issue that forms part of today’s governance landscape. Organisations for which company secretaries work must not only adhere to the Equality Act, they must also report on things like the gender pay gap and strive for greater diversity at boardroom level.

Diversity as a governance issue has been brought into sharp focus in recent years, not least thanks to the targets set by the Davies, Hampton-Alexander and Parker reviews. And progress has been decidedly mixed. So while, for instance, there has been genuine progress in meeting the Hampton-Alexander Review’s target of women taking one third of all seats on boards, the ‘One by 2021’ target set by the 2017 Parker Review is still a long way from being met. Expand the conversation beyond gender for just a moment, and we see that the rise in the number of directors of colour serving on FTSE 100 boards has been derisory. An increase of just 0.3% in two years, taking the total number of directors of colour up from just 2% to a fractionally higher 2.3%, is very disappointing.

Similarly, while the FTSE 350 is more or less on target to deliver improved gender balance in FTSE leadership, the battle for better gender diversity is far from being won. Almost a fifth of FTSE 350 companies were contacted recently by the Investment Association and the Hampton-Alexander Review, asking how they intended to improve the gender balance on their leadership teams given that some 63 companies have all-male executive committees.

Pipeline management is the obvious answer, but a lack of effective work in this area has hampered efforts to improve diversity at the pace required. Historically, the Boardroom Bellwether survey that the Institute runs in association with the Financial Times has shown that the female executive pipeline is a cause for concern, with the majority of respondents between winter 2015 and winter 2017 stating that their female executive pipelines were insufficient.

Fast forward two years and that remains the case. The most recent Hampton-Alexander Review revealed that too few women are being appointed into senior leadership roles. Some two-thirds of all available roles in both the FTSE 100 and FTSE 250 are still going to men.

Businesses are under increasing scrutiny for the efforts that they are expected to make in this area and governance is inextricably linked as well. The Institute’s Next Generation Governance report showed that social injustice issues, which include but are not limited to gender inequality and pay disparity, are key areas that will shape our understanding of what governance really means going forward. It is incumbent, therefore, on governance professionals to do what they can to bring the big ideas to the boardroom before legislation forces boards to take notice.

The Institute has a long history of collaborating with and supporting the work of regulators, Higher Education Intitutions, government and others in the area of diversity. It is an area of focus that forms the basis of some work around diversity networks that we are currently undertaking with the Centre for Synchronous Leadership, details of which will be published later this year.

Furthermore, the notion of ‘Collective Individualism’, upon which the #EachforEqual campaign is based, is also a concept which informs the ‘Company Secretary as Changemaker’ series, which is currently being offered in partnership between the Institute and Company Matters and which considers how the governance professional can be a force for change. By being the change that they seek, and using their influence in the boardroom to improve behaviours and change mindsets, governance professionals can have a very definite, and very positive, impact on society.

Keeping diversity on the board agenda, challenging leadership stereotypes and reminding directors not just of their legal duties, but of their moral duties too, is an important function of the governance role. And with women now equating to 75% of all students on the Institute’s roll, we are not just talking the talk in terms of equality – we are walking the walk too.