The latest excellent Cranfield University School of Management report on women on UK boards draws attention to a specific problem: that stricter vetting of candidates to become directors of banks may work against the aim of improving gender balance.
If a premium is placed on banking expertise above all else, and fewer women than men have such expertise, the old Catch-22 of directorship will apply – you can’t join this board because you don’t have experience, but you won’t get experience without joining a board.
Cranfield have usefully interviewed a number of chairmen of FTSE 100 companies who warn about this side-effect. Here are the most colourful comments:
“The FSA requirements on banking boards will lead to a monoculture developing”
or this, from another chairman:
“The ultimate nightmare is that all our boards end up with clones of recently retired audit partners, because they are the only people that could pass the exams.”
As I commented in my Lombard column today, while the Financial Services Authority, which conducts this more intrusive vetting process, has the best interests of the system at heart – and denies that it is deterring female candidates – the very fact that there is a high-level perception that women are at a disadvantage could put female candidates off.
Marcus Agius, chairman of Barclays and presumably one of those interviewed for the report, was asked about this at the launch of the study today. His response:
“At Barclays we have recently appointed two new [female] non-executive directors. They were well qualified as they needed to be. There was no difficulty with the FSA. I think the way to deal with that is to make sure that one isn’t frightened of the process, you don’t prejudge the process. If you find someone who you want on your board I don’t think the FSA exam or interview, whatever it is, should be the limiting factor.”