Women on board - is it tokenism? ; MONEY, MONEY, MONEYJulie-Ann Haines, customer director at Principality Building Society, looks at forced boardroom... [Western Mail (Wales)]
(Western Mail (Wales) Via Acquire Media NewsEdge) Women on board - is it tokenism? ; MONEY, MONEY, MONEYJulie-Ann Haines, customer director at Principality Building Society, looks at forced boardroom gender balance
RECENTLY, it was reported that banks, building societies and investment firms will have to set a target for the number of women on their board of directors from 2014.
Under the ground-breaking rules, banks will become the first British businesses obliged by regulations to set out targets on gender balance.
A step in the right direction in so far as women's rights are concerned you may think but do we really need the introduction of regulatory measures to introduce gender equality to the boards of financial institutions; doesn't this belittle the intellectual value that women (who have already legitimately earned their position at board level) add to the mix and are we in danger of compromising the effectiveness of the board with this token gesture? The rules are part of a binding European Union Directive, to which the two UK agencies that regulate the financial services industry, the Prudential Regulation Authority and the Financial Conduct Authority, will adhere.
The EU proposals say that companies must have clear, gender- neutral criteria for choosing non-executive directors and that if candidates are found to be equally qualified, then preference should be given to women.
In 2006, Norway passed a law requiring 40% of boardroom seats go to women - or men in the cases of femaledominated boardrooms. This was achieved in 2009 and studies have shown that having more women on boards has led to more focused, strategic decisionmaking, increased communication and less conflict. A recent report from Cranfield University showed women held just 17% of the board positions among the companies listed on the UK's FTSE 100.
If targets are going to be set for having female board members then shouldn't there also be targets to reflect the wider community with targets for age, race and even thinking styles? Many are also underrepresented on boards so why should women be the ones that are targeted? To work on the board of a mutual building society our directors have to be experts in the market and have knowledge of audit, finance and marketing, whilst always looking at the risks and what is best for our customers.
This is what all our Board members do and we believe that they are the strongest and best people for the job.
Having the most qualified and knowledgeable board is our priority at Principality.
We have three female board members that have all been appointed on merit, because they are the best people for the job, not because they are female. In his review of cultural standards and business practices at Barclays this year, Anthony Salz said: "Attracting the strongest and best qualified people to non-executive roles should be of concern to us all."
Setting a target for the number of women on a board of directors could be difficult to achieve. Surely it should be on merit rather than gender? The regulators state that companies will need to explain how they are going to reach their targets and it will be interesting to see whether this is a step in the right direction or just a token gesture that in reality won't come to fruition.
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