How many women does it take to change a culture?

…that depends, it seems, upon where they are placed in the organisation.

In October 2015, Lord Davies of Abersoch reported upon his five year review of boardroom diversity, stating that representation of women on FTSE 350 boards had more than doubled since 2011, with 19.6% representation of women on FTSE 250 boards and 26.1% representation on FTSE 100 boards- exceeding the 25% target set by the review. No all-male boards existed in 2015, compared to 152 in 2011.

So far, so good- not 50% representation, but progress, you would think, and significant progress at that. But this does assume that all positions on boards are equal. David O’Brien, in conjunction with the firm Beyond Analysis, recently conducted an in-depth analysis of over 1000 annual reports from FTSE 100 companies and found that the picture is not as rosy as claimed by Lord Davies and could be considered to be far from the ‘near revolution’ and ‘profound culture change’ which has been described.

The number of women directors has, as claimed, doubled-but digging a little further into the figures, Mr O’Brien reveals that 83% of those new board appointments were non-executive positions.

105 male executives were replaced by 83 female non-executives. Only 10 of the 151 CEO appointments analysed in this time were awarded to women, with only two women appointed internally to the role of CEO. The upshot of this is that, whilst diversity has appeared to increase, those women in post are in less valued positions, and much less able to influence or change the culture of a company than the men they replaced. In this case, it’s almost as if diversity has worked against women as agents of change. The real danger is that Lord Davies, in congratulating those businesses and search firms who have effected this change, has allowed the business world to pat itself on the back, claim a job well done and carry on as usual. Has anything in the company culture actually changed if the women around the table do not have the same degree of influence as their predecessors? I would suggest not.

Moreover, the work of Professor Alex Haslam and Professor Michelle Ryan of the University of Exeter suggests that women are appointed to leadership positions in very different circumstances to men. The ‘Glass Cliff’ research project seems to suggest that women are more likely to be appointed to precarious leadership positions, with a higher risk of failure or attracting more criticism. In 2003 an article in The Times suggested that boards with women members perform less well than all male boards. Yet archival analysis of company performance revealed that women tended to be appointed to boards of companies already experiencing poor performance in the run- up to the appointment being made and their position was therefore more precarious than it might otherwise be. In fact, following the appointment of a woman, share prices tended to stabilise or increase.

This archival work has also been backed up by experimental studies of the ‘appointability’ of women to boards, where a similar effect is seen- female applicants are viewed as more attractive for posts when a company is in trouble than when all is going well. More worryingly, this effect is seen in studies carried out with secondary school students too.

Now, a charitable view of the Glass Cliff research might be that women are perceived to have the skills necessary to turn around a company, make the organisational changes which will lead to success. But when coupled with David O’Brien’s work, a bleaker alternative presents itself. Women are appointed to roles where they can have less influence, and when they are appointed, it’s in situations where they are less likely to succeed. They are expendable.

So instead of being congratulated on their success in moving towards parity, perhaps Lord Davies and those FTSE 100 companies need to consider that it’s not simply a numbers game.

Gwen Byrom, Headmistress, Loughborough High School

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