Promotion of Women in Business

Claire Perry Excerpts

Tuesday 22nd March 2011 Westminster Hall

[Mary Macleod]

I agree with my hon. Friend. There is not a one-size-fits-all way of doing things. Different women will have different career paths and will do things at different stages of their lives. We want the flexibility to adapt to those different career paths and still to allow people to get to the top levels in business. I have seen the lack of opportunity and meritocracy that currently exists in business. We are not drawing from the possible range of talent that exists. That means that organisations suffer, that business and the economy generally suffer, so the country suffers. We need to do something about that, because there is a huge untapped pool of talent.

Why is this issue important? As my hon. Friend the Member for Maidstone and The Weald has mentioned, some of the reports and studies are not only about aspiration, but performance. Studies such as one by McKinsey’s have looked at a range of statistics that show that companies with a higher proportion of women in senior management teams, in essence, outperform their rivals, with a 42% higher return on sales, a 66% higher return on invested capital and a 53% higher return on equity. There is improved decision making, as was mentioned. Such companies may also be more responsive to the market, make better decisions and have improved corporate governance.

The current position is an issue. Only 12.5% of directors of FTSE 100 companies are women and only 7.8% of directors of FTSE 250 companies are women. Some 52.4% of companies have no women on their boards at all. That is a disgrace. There are a few reasonably good examples. GlaxoSmithKline, in my constituency, has 38% of senior positions held by women. It is good that that has improved year-on-year in the past five years, and that it has improved at the different levels—whether manager, director, senior vice-president or vice-president. That is what we want to see: an ongoing improvement at all levels so that there is opportunity for all.

In so many organisations, the frustrating thing is that progress has plateaued. Contrary to the widely held myth, there is no evidence to suggest that there is a shortage of appropriately qualified women in the pipeline. There are plenty of women to take on board-level roles, but we need to start to change the thinking about what the requirements are. As Lord Davies said, we must promote on the basis of merit and skills. That is important if we want a true meritocracy, and to have true fairness and opportunity. Lord Davies’ report mentions getting companies to talk about and publish their figures. That is a great starting point and something that we absolutely should do.

Other measures that need to happen include the better mentoring and sponsoring of the next generation of executives. One programme that exists and works very well is the FTSE 100 cross-company mentoring programme. Many chairmen of FTSE 100 companies are trying that new mentoring approach that will help in the long term, because it aims to sponsor, nurture and mentor the next generation and help them with the skills and experience to get to the next level.

More also needs to be done with networking for senior women in business. A study by Higgs and Tyson found that almost half of the directors they surveyed had been recruited through personal friendships and contacts. That is probably something that we all recognise, so it is important to build up those networking opportunities.

We also need to fight media images and stereotypes. The more we can create, promote and highlight role models, the better it will be, because we want the younger generation of women to see that it is possible to get to the top of their business or sector, and that that will happen purely on the basis of fairness and merit.

Also, we should promote companies that have a good record on gender diversity and flexible working options, which, for some people, is important. We have to work with the chairmen of FTSE 100 and FTSE 250 companies so that, as Baroness Bottomley put it, they look through the window when recruiting boards and not in the mirror. That is something that needs to be adjusted so that, as my hon. Friend the Member for Maidstone and The Weald said, people do not recruit only those who are similar to them and who are already on boards but see the value of having new and different skills on boards.

[Claire Perry (Devizes) (Con)]

My hon. Friend is doing a fantastic job of setting out many of the challenges that need to be overcome, and how we might do that. Does she agree, though, that perhaps there is another approach, which is to think about how we actually structure roles? It is inevitably the case that those of us with families end up being torn in our daily lives. I have always thought that job shares—potentially having a Cabinet position as a job share—would send a powerful signal, allow women to achieve their best and also recognise the complexity of many of our lives.

[Mary Macleod]

My hon. Friend makes an excellent point. If there were job sharing in politics—there is no reason why the role of MP or Cabinet Minister could not involve a job share—we would show that we have made a real difference and made ground, and that there is no reason why that cannot happen in business.

The time has come to address the issue and really do something about it. It has been talked about for so long but very little has been done. The opportunities for business right now are too significant, at a time when we really need enterprise and growth, flourishing businesses, and more people creating their own business. We must do something about the issue. Women must be recruited to senior levels in business based on their merit and skills. Perhaps the definition and assessment of the skills that are required need closer attention, but I have no doubt that plenty of women with the right skills to take companies forward are waiting for the opportunity to do so. If we could let everyone, both men and women, aspire to be their best and achieve everything that they want, businesses across the country would flourish.