Promotion of Women in Business

Mary Macleod Excerpts

Tuesday 22nd March 2011 Westminster Hall

[Mary Macleod (Brentford and Isleworth) (Con)]

I congratulate my hon. Friend the Member for Maidstone and The Weald (Mrs Grant) on securing this important debate on an issue that, for me, is all about aspiration and allowing individuals—men and women—to achieve their potential. We know that many women are stopped from achieving that potential, from being the best they can be and from delivering real value at senior levels in business. We need to do something about that.

I welcome the report from Lord Davies. He has looked at the issue in detail, involved many people in the discussion and come out with a good series of suggestions. I am a strong believer—as might be imagined from me being here—in the importance of having more women in business at senior levels. I worked for more than 20 years in the City in different sectors and have seen the lack of women at senior levels. I fundamentally believe that that is not necessarily because women are doing something wrong—although I agree with my hon. Friend that they can promote themselves better—but because there are serious issues about how we select women and people on to the boards in the City.

[Anne Marie Morris (Newton Abbot) (Con)]

Does my hon. Friend agree that part of the challenge is the structuring of the career path? We are all now living longer. If we could find ways of structuring career paths, whether in the corporate or professional worlds, so that men or women could go into it at different times, that might ease the problem. In the professional and corporate worlds, we see a hub at the age of 30 where it is either make or break—the same time that many women want to have their families. That puts on undue pressure and makes that decision much harder than it would be if we had a career span that was much longer, over the many years that we are going to be working.

[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.

--- Later in debate ---

[Julian Smith]

My hon. Friend makes an important point. There is a great deal of work to be done in the public sector as well as the private sector, but the Government now need to put significant pressure on the private sector, and not just on targets. One area I would advocate as well worth looking at is performance management generally in organisations. Can the Government do more to highlight those organisations that performance manage their staff and that look at things such as the approach that my hon. Friend the Member for Devizes (Claire Perry) suggested? Can we highlight, as well as company growth, those companies that manage their human resources positively?

[Mary Macleod]

Does my hon. Friend think that it is important to have real performance measures and that that should affect how people are remunerated? If they are not assessed on that, which might affect what they earn, people tend to forget about it. It is a nice-to-have, but there is no focus on it and nothing ever gets resolved. If people are actually measured on that and remunerated accordingly, something might change.

[Julian Smith]

My hon. Friend is absolutely right. The client that I worked with that did best in this area had such considerations hard-wired into compensation and promotion at all levels in the organisation, not just at board level. To get a pipeline of candidates for board positions, one has to work right down the organisation, at every level of management. In that organisation, the key question at every performance review was, “What diversity hiring have you done in the past six months?”

A relentless focus is required in the House and at every level of government. I am not convinced that having a unit on women and equality is the right way to go. We need this to be driven from the highest level in the Department for Business, Innovation and Skills, and we need to showcase with awards and in every way possible those organisations that are doing the right thing.

--- Later in debate ---

[Lorely Burt (Solihull) (LD)]

I congratulate my hon. Friend the Member for Maidstone and The Weald (Mrs Grant) on securing this important debate. I also echo the excellent suggestion of my hon. Friend the Member for Skipton and Ripon (Julian Smith) to introduce a Select Committee on women and diversity. The Minister will be listening carefully, and I shall make representations through the Liberal Democrats’ Business, Innovation and Skills parliamentary committee, which I co-chair.

We have heard excellent contributions this morning, and I need not reiterate why we must bother with women on boards. The aspiration of equal opportunities clearly does not work. It is 40 years since the Equal Employment Opportunity Act 1972, but still only 12.5% of members of FTSE 100 boards are women, and only five are run by women. Evidence shows that companies that increase the number of women in leadership positions outperform those that do not. Clearly, it is good for business to have more women.

On stereotyping, Martin Vander Weyer said in The Spectator on 26 February:

“Women are more risk-averse, less driven by raw competitive urges, and more likely to stay focused on generating steady returns; and those are precisely the qualities needed in non-executive directors to counterbalance the machismo of thrusting executives.”

Such stereotyping is dangerous. Not all women are like that, any more than all men are testosterone-fuelled risk-takers. We all have a bit of yin and a bit of yang in us, and it is important not to accept stereotypical opportunities.

Who is calling for change? Last year, the CBI called for a comply-or-explain policy for all businesses, and Viviane Reding, European Commissioner for Justice, is considering calling for quotas. She has started a five-year strategy to achieve 30% of women on boards by 2015 and 40% by 2020.

What are the problems? Many have been discussed this morning, and they include lack of flexibility, and linear advance patterns. My hon. Friend the Member for Brentford and Isleworth (Mary Macleod) talked about whole-life careers. We now have many careers during our lives, and the idea that one must go from one step to another clearly does not work for women or for men.

The male culture of people of the same sex, who perhaps went to the same school or who even belong to the same club, is harmful in achieving diversity of view and opinion and opening up boards to new ideas in all sorts of ways. On nominations committees, we heard an expert speech on the position that head-hunters are in. They may be eager to please, but I welcome the voluntary code that is being promoted by Lord Davies.

There are many things we can do to help—for example, flexible working. I am delighted that the Government are committed to flexible working not just for women and not just for men with children, but for everyone, because quality of work and life makes people better contributors to the work force. We must recognise people for their contribution, not for the number of hours their coat is on the peg at work. I call that “presentism”.

Collaborative leadership styles would be much more positive and helpful in some circumstances, as would effective succession planning. Women respond really well to coaching and mentoring, and we are often our own worst enemies, because we do not recognise how good we are. I had to have a stiff talking to by a friend before I accepted that I would be good enough to become a Member of Parliament. Talent must be recognised in organisations. My hon. Friend the Member for Maidstone and The Weald referred to the leader of the Conservative party and said how well the Conservatives have done in bringing on women. One could argue about whether that constitutes positive discrimination, but the A list has certainly introduced a new generation of women MPs, and I assure you, Mr Caton, that there are no token women in this Chamber; they are all full-on, first-class Members of Parliament.

[Mary Macleod]

Does my hon. Friend agree that the Conservative party increased the number of its women MPs at the last general election partly because we had a leader overseeing the matter from the top? He promoted it and ensured that it was at the top of the agenda. The same must happen on boards. Does she agree that it is important for chairmen, chief executives and board members to say, “This is really important; we must do something about it.”? If that happens, something will be done?

[Lorely Burt]

I could not agree more.

I want to finish by referring again to Lord Davies. I have spoken about head-hunters and the requirement on listed companies to disclose annually the proportion of women on boards, how many are senior executives and how many are in the work force generally. That would shame a lot of companies into looking at the poor representation of women.

Lord Davies leaves formal quotas as a future possibility, but states that there is overwhelming opposition to them. Well, there would be. To require someone to comply would challenge the stereotypical grey men in grey suits. Will we need quotas? The Davies challenge is for the make-up of boards to include 25% of women within four years. I believe that we will probably need to move towards some form of quota system if boards do not comply with that. This is the last chance saloon for the grey men in grey suits.