Approaches to Improving Gender Balance and Broader Diversity of Boards
19. At a policy level, there are three established approaches to improving gender balance and broader diversity of private sector boards:
- Setting quotas for the number of women on private sector boards. Over 20 countries have adopted quotas and whilst they are effective in changing the composition of boards, they are contentious with concerns that they can undermine women's achievements. In addition, the introduction requires appropriate supports to be in place and for sufficient time to be allocated to enable companies to achieve the quotas.
- Voluntary targets (sometimes referred to in the literature as coaxes) aim to increase the number of women on private sector boards without enacting legislation. This is the approach adopted by Scottish Government through Partnership for Change and the UK Government through the Lord Davies Review process.
- Corporate transparency requires companies to report on equality and diversity policies, initiatives and outcomes alongside other statutory reporting (such as financial reporting). This is intended to encourage companies to adopt approaches to improve the gender balance of their board - with some countries adopting a 'comply or explain' approach.
20. The vast majority of stakeholders and companies consulted during this research felt it was important Scottish Government does not impose quotas - as these could lead to inappropriate appointments, could lead to undermine the progress of women and in some cases impact on the sustainability of companies. Whilst there was broad support for the Partnership for Change voluntary commitment, some consultees expressed concerns it could become perceived as a quota over time.
21. Turning to the approaches taken by companies themselves:
- 29% of companies completing the e-survey had no policies or processes in place to address the gender balance of their boards.
- In general, most companies that had adopted policies or processes to address the gender balance of their boards had only put in place a small number of approaches. There is limited evidence of companies adopting a comprehensive approach to tackling this issue.
- The most commonly adopted policies and procedures all related to developing the pipeline - mentoring and/or peer support for senior managers to prepare them for board positions, creating networking opportunities for senior managers and training for senior managers to prepare them for taking on board roles.
- Few companies appeared to be adopting processes or procedures around recruitment processes or placing greater priority on improving the gender balance of the board (such as setting targets or reporting on balance in their annual report).
22. In terms of ' what works ', the factor that appears to be of most value to companies is commitment by the board and/or Chief Executive to improving the gender balance of the board. The other factor that appears to have an important impact is the changing gender profile of the business (and to a lesser extent, the sector as a whole) with this leading to more women in senior management roles. Companies that are more gender equal at the board level (40% or more of board members are female) were much more likely to say that having policies and processes in place to improve board and staff understanding of equality, diversity and potential bias had been of value to them than those with fewer women on their board.
23. Other approaches identified in the case studies as being of value to improving gender balance of boards included:
- Embedding efforts within wider HR policies - such as Investors in People.
- Developing flexible working arrangements to attract and retain females in senior management roles.
- Making board recruitment processes more transparent.
- Providing mentoring and peer support for new board members.
24. Few case study companies had any explicit policies, processes or procedures to help improve the broader diversity of their board . Where action was being taken, this tended to focus on gender rather than other protected characteristics.
25. Only half of the case study companies had accessed any external supports - and in many cases this was a relatively minor element of their approach. In general, both companies and stakeholders felt there was a lack of awareness of what support is available - meaning this resource is not being fully utilised. Concerns were also raised by some stakeholders about whether this support is sufficiently resourced and evaluated.
26. In terms of the support stakeholders and companies would value from Scottish Government, this included:
- Providing clear leadership on this issue - although to have credibility it was felt important that the public sector achieved gender balance and broader diversity on their boards.
- Increasing the focus on this issue - for example, highlighting research, using procurement to encourage companies to consider the gender balance of their board and encouraging companies to provide information on this (through accreditation).
- Putting in place supporting infrastructure to develop the pipeline of women and other individuals with protected characteristics in senior management roles. This includes working with young people around career choice and aspirations, improving the availability and quality of childcare and ensuring leadership development programmes are available.
- Providing guidance and tools (such as checklists and good practice guides) to enable companies to make progress on this issue. Where possible, these should be embedded into mainstream business development supports (such as Business Gateway, Scottish Enterprise and Investors in People).