This week, Financial News (FN) unveiled its list of 100 influential women, a formidable roll call of the most powerful females in the City. Between them, these individuals wield significant influence in the City’s upper echelons and in most cases have risen (or are on course to) the very top of their profession.
This progress notwithstanding, these achievements do not change the fact that when FN’s 100 most influential people list was published earlier this year, barely 10 per cent of that list was female, showing that women are still, to a large extent, shut out from the major circles of influence and decision-making in the City. Credit must go to FN for ensuring that the competent and powerful women in finance receive recognition, which they have plainly worked hard to earn. But when will we get to a point where the ‘main’ list contains a more equal female representation thereby negating the need for a separate ranking for women?
The stage is set for a pitch battle in the European Union (EU) as the main parties involved disagree fundamentally over how this can be achieved. Earlier this month, the European Parliament’s Legal Affairs committee and Women’s Rights and Gender Equalities committees voted overwhelmingly in favour of a quota proposal that would oblige publicly-listed companies across Europe to have forty per cent women non-executive directors. The draft legislation will now be considered in the next EU parliamentary session in the spring of 2014, and then proceed to the Council of Ministers for a final vote.
Many European governments, including the UK, oppose the move, as do City practitioners. Even the 30 Percent Club, founded by Newton Investment Management’s Helena Morrissey, has set a rather more pragmatic target as its name suggests and is not actually in favour of quotas. It is true that quotas are an inelegant solution, but in the absence of other responses and the severity of the problem, how satisfactory are the alternatives?
Cultural change and workplace mentoring are ideal but slow at producing results and in the interim a generation of women could potentially fail to fulfil their potential. The Davies Report, a 2011 government-led review of the lack of equality on boards, found that at the current rate of progress, parity on boards in FTSE 100 companies would take seventy years to achieve. This is not an acceptable state of affairs for anybody, and one of the quickest ways to deliver the cultural change needed would be to implement at least some form of quota.
On the other hand, it could potentially have the opposite effect, as working against the perceived principle of meritocracy creates a feeling that women are present as tokens rather than participants. We also need to consider what life will practically be like for women who assume allocated places on boards – will their voices be heard if pre-existing executives, either male or female, hold a belief that they have not earned or do not deserve that role, unfounded as it may be?
There is surely no-one who would agree that the existing 10 percent of women who have roles on FTSE boards are the sum total of women who are capable enough to hold these positions, and so talented women are being overlooked at some point in the chain. Whether quotas ultimately play a role in the process or not, the business world needs to make it an urgent priority to identify and dismantle the structural, societal and cultural constraints that are contributing to this unjust imbalance.