Increasing representation of women on private sector boards in Scotland

Case Study I

Background

The company provides business development and commercialisation support to new businesses mainly in the life sciences sector. There are 6 employees based at two locations in Scotland. The company has seven board members. Four are executive directors and 3 are non executives. Two of the board members are females.

Seeking gender balance and broader diversity is seen as an important issue in the company as they believe diverse boards are more effective and more able to develop different ways of thinking about issues. Therefore they are proactive about seeking equality and diversity on their board through looking to support talent within the business and also looking for talented peosple from underrepresented groups through their contact and networks. They feel these groups are an 'untapped resource which needs to be utilised more widely and effectively' because although a lot of people from these groups work within the sector, few progress to management or board levels. Having the required skill set is still the most important factor when selecting new board members, but achieving a diverse board is the second most important factor. It has also influenced the work that they do and they make the case for diversity now with the nascent businesses they work with.

The company believes it is primarily the responsibility of boards to achieve gender balance, but it is helpful if the public sector endorses the benefits of gender balance. They felt that the Scottish Government could also use tools like procurement to encourage companies to think about how to improve the gender balance and broader diversity of their boards.

Challenges around Achieving Gender Balance on the Board

The main barrier they face to achieving greater gender representation on the board is that as a small company there are limited positions on the board for non-executive directors. However, they think that they could improve their practice here by amending the structure and tenure of their board. However there is some inertia about this because they have low board turnover.

More generally in the life sciences sector, the main barrier is that many boards still prefer to appoint people that they know and have worked with in the past and this can make it difficult for women in the sector as the commercially orientated life sciences sector is predominantly a male dominated environment, with few women reaching strategic management levels even if they are a large proportion of the workforce. It can be difficult to challenge companies if they do not see the benefits of gender balance. There can be few female candidates for board positions or females do not have the industry-specific skills and experience they require.

Company Plicies and Practices

The company has a number of policies and practices that are relevant to promoting equality and diversity and gender balance including the following.

Promoting Equality and Diversity

They have an equalities policy covering employees and the ways that they will work with the companies they support.

Promoting Equality and Diversity and Increasing Gender Parity on the Board

Commitment by the Board and Chief Executive to improving gender parity: The company's founder has shown strong leadership in the development of skills for board membership. The board member interviewed had recently attended an international leadership course and achieving equality and diversity was a key part of the philosophy of the course. This had influenced her to instil the same philosophy in the company.

Changing gender profile of the business leading to more females in senior management roles: The company believes that it is important to make a contribution to developing talent in their sector by supporting people to develop the skills they need for senior management and board membership. This includes offering support to females and people from other groups. One of the ways they do this is by offering graduate placement programmes which includes shadowing their board. In the recognition that it can be quite difficult to get board experience and to encourage more people to put themselves forward for board positions, they have offered people from the companies they are developing opportunities to shadow their board. They feel this is particularly useful for younger people as it helps them to understand board processes. They feel that there is a gap in understanding of governance and few opportunities for people to see boards in action. 'People need to see the nuts and bolts of being on a board'.

There is also commitment to developing their internal talent pipeline so that employees can progress to director level if they have the talent and skills. This can involve providing personal development opportunities and mentoring. They have been able to recruit females with these talents and skills and provide mentoring and peer support to prepare them for taking on board roles. This approach was used to recruit their 2 female board members. Both employees of the company showed they could make a contribution at board level and demonstrated the skills they were looking for which included legal and financial knowledge and skills and capability to have insight into academic and industry aspects of the sector as well as a good cultural fit with the company.

The board member interviewed was one of these individuals. Prior to coming onto this board she applied for other board positions but felt her young age, lack of experience in the private sector (although she had been on the board of a couple of charities) and to an extent 'the old school tie network' prevented her being recruited. This was frustrating. Among the companies she applied to there appeared to be 'no buy-in to diversity at the top level' and in some cases the 'board was seen as a social club with resistance to opening it wider'. In this company diversity and developing talent are valued. This helped her achieve a board position.

Several aspects of the way that the board operates help to support participation of people with different backgrounds. There is 'no dominant male culture'; the board meets at 5pm to take into account people's caring commitments; all activities and events are inclusive; and there is no 'pressure to socialise'.

Setting Targets: They have no targets for representation of any characteristics although they are considering whether this might be useful in relation to the companies they are helping to build. It is most likely that any targets set initially would be focused on gender initially.

Interventions and Supports

They have used a consultancy that helps companies look at gender balance and this experience has helped them to develop their approach and to be more proactive about promoting gender balance in the companies they work with and helped them feel more comfortable about promoting the importance of the issue.

The board member interviewed was a Saltire Fellow before she became a board member. She felt this was a transformative experience and helped her make a transition from the public to the private sector. The experience helped to embed within her the idea of the importance of diversity. In her cohort of Saltire Fellows there was complete gender balance and during the course she saw many women in board roles.

The board member has received external support to help her fulfil her position as a board member including a Scottish Enterprise course 'Investing in Women' which aims to develop leadership and provides training on the role of the board and how to work effectively as a board member. This helped her to better understand her contribution to the board and how to be more effective. However, she felt this kind of training is fairly limited in scale and in general the training opportunities available to all board members could be increased. In particular opportunities to shadow board members and access to mentors would be helpful to increasing diversity and gender balance on boards.

Key Points

1. Seeking gender balance and broader diversity is an important issue in this company leading to several benefits including a more effective board.

2. They are taking a proactive approach to achieving gender balance within their own board and are also active in encouraging companies in their sector to think more about the benefits of diverse boards.

3. The nature and size of the board can create some barriers as there is low turnover and limited non-executive positions. More generally in their sector there is limited acknowledgement of the benefits of diverse boards. Few females put themselves forward for board positions and may not have the industry specific skills and experience that are seen as important.

4. The company is tackling these challenges by supporting women to get board experience and helping them develop the skills they need to be recruited to boards.