The danger of preaching to the converted

“Any CEO who ignores the 42 per cent increase in sales [that diversity can provide through better corporate performance] should be shot,” Lynne Featherstone, minister for equalities, said this morning. “It’s not about equality for equality’s sake. It’s about making your company better.”

Featherstone was speaking to an audience of FTSE 350 chairmen, executives and business leaders at the “Women on Boards” breakfast briefing in London.

The arguments rehearsed by an eminent line-up of panellists at this breakfast briefing were not new. Nor were the findings of the six-month monitoring report produced by Ruth Sealy and her colleagues at Cranfield University’s School of Management. The report tracks FTSE 100 and FTSE 250 companies’ progress towards minimum targets set out by Lord Davies’ committee in February. These targets have been set as “an effective voluntary alternative to quotas,” says Denise Wilson, a member of Lord Davies’ steering group.

There are more women sitting on the boards of Britain’s largest companies today than six months ago – 21 more, to be precise. Of these, 14 had no prior FTSE 100 or FTSE 250 board experience, showing a willingness by board chairmen to consider a wider pool of talent for non-executive positions. For the first time there are more FTSE 250 boards with at least one female director than all-male boards, and only 13 all-male boards survive in the FTSE 100.

While welcoming the improved diversity figures, Sir Philip Hampton, chairman of the Royal Bank of Scotland, warned that progress was still slow, making it difficult to meet the upcoming 2013 and 2015 targets. He urged companies to examine the pipeline of talent coming through organisations at the executive committee level and the layer below. To date, only 4 per cent of FTSE 100 and FTSE 250 companies have set diversity targets for their executive committees.

Steve Holliday, chief executive of National Grid, warned that all the work by Cranfield and others failed to take into account the numbers of women leaving board positions, for whatever reason.

After the presentations and panel discussions, the real debate began. While an impressive turnout of FTSE company chairmen (and yes they are all men), chief executives and non-executive directors is proof that diversity is taken seriously in parts of corporate Britain, that is not the whole story.

Perhaps, if Boyden, the executive search firm that co-hosted the breakfast, really wants to accelerate change, it should organise a debate to include representatives of companies that have no women directors, no targets and little belief in the arguments.

“Performance in a company is about engagement, and getting your staff engaged,” said Lord Davies via a video link. Engagement, I would argue, needs to proselytise beyond the church walls if diversity is to be more than a footnote in the corporate and social responsibility paragraph of companies’ annual reports.

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About our bloggers

Liz Bolshaw

Liz Bolshaw is a business journalist and editor. She has been a successful book publisher, online editor, magazine editor and publisher.

She was launch editor of the Europe-wide online community Entrepreneur Country, has published magazines for PwC, 3i, dunhill and Bafta, and launched The Sharp Edge, a magazine for and about entrepreneurs, with Duncan Bannatyne. She is a regular contributor to Thomson Reuters’ Venture Capital Journal.

Her last project for the Financial Times was as editor of the paper’s Business Education magazine.

Rebecca Knight

Rebecca Knight is a freelance journalist based in Boston. She writes regularly for the FT on business education, entrepreneurship, and management.

Andrew Hill

Andrew Hill is an associate editor and the management editor of the FT. He was City editor of the FT and editor of the daily Lombard column on British business and finance from September 2006 to December 2010.

He was the FT’s financial editor from June 2005 to September 2006, with overall responsibility for coverage of companies and markets. Before becoming financial editor, he was the FT’s comment & analysis editor, in charge of the paper’s opinion and features pages.

From 1999 to 2003, he was the FT’s New York bureau chief. He joined the FT in 1988 and has also worked as foreign news editor, UK companies reporter and correspondent in Brussels and Milan.

Pino Bethencourt

Pino Bethencourt is a professor and leadership expert at IE Business School in Madrid. She is also an author and executive coach.

Lynda Gratton

Lynda Gratton is professor of management practice at London Business School.

Linda Tarr-Whelan

Linda Tarr-Whelan, former ambassador to the UN commission on the status of women, is a Demos distinguished senior fellow.