December 10, 2010
Group Sets Goal to Get More Women on Boards
By JULIA WERDIGIER
LONDON — When Helena Morrissey, chief executive of the money manager Newton, brought home an industry award for “Most Influential Woman in Asset Management” in October, her 5-year-old son asked whether there was a similar category for men. There was not.
“It showed we’re just not there yet when it comes to gender equality,” Mrs. Morrissey said.
That is why she set up an initiative last month, backed by the chairmen at the Lloyds Banking Group, HSBC, the retailer J Sainsbury and other companies, to elevate more women to management boards. The chairmen pledged to spread the word among senior executives about the need for more diversity on boards in Britain, many of which had never had a female director.
The goal is to raise the number of women on boards to about a third by 2015 — without resorting to the quotas that are now law in Norway and France and are being phased in by Spain.
At the 100 largest publicly traded companies in Britain, 12.5 percent of directors were women this year, compared with 12.2 percent last year and 12 percent the year before, according to a study by the Cranfield School of Management, which referred to “a situation of stagnation.” About one in four companies still have exclusively male boards, including the energy provider International Power and the retailer Associated British Foods.
“The initiative is a third way between doing nothing and introducing a quota,” Mrs. Morrissey said, conceding that the 30 percent goal was ambitious. “We want to get there with momentum instead of regulation.”
Like the British government, Mrs. Morrissey says she believes that introducing a quota should be a last resort, preferring to focus on merit. She also said a quota was undesirable because it could create the perception of discrimination.
Theresa M. May, the British home secretary, indicated in a speech last month that improving equality should be more up to the individual and less to regulation. She also suggested using the concept of “fairness” rather than “equality,” which she said had become a “dirty word” and was “seen by a lot of people as something that is available to others, and not to them.”
Mrs. Morrissey’s initiative, named the 30% Club, seems well timed. The financial crisis had exposed the shortcomings and weaknesses of management boards and made chairmen ponder whether a more diverse board might lead to better decision-making. A new British corporate governance code that took effect in June, partly to help avoid another banking crisis, says that boards should be “well balanced,” with gender diversity, to avoid “group think.”
Prime Minister David Cameron picked gender equality as a priority when he took office in May. As a first step, he commissioned a report on what the government could do to increase the number of women on boards, something he says he believes would increase productivity. The findings are to be published in February.
Ruth Sealy, deputy director of the International Center for Women Leaders at the Cranfield School of Management, also noticed “the momentum is gathering in Britain.”
“People have been talking about this for a long time, but the noise and the seniority of people who joined the discussion has increased,” Ms. Sealy said.
Richard Emerton, managing director at the recruitment advisory company Korn/Ferry International in London, said he had “a surprising number of requests from chairmen today for lists of and introductions to possible female candidates.”
“The debate is now moving from purely technical skills to finding people that can help improve the boardroom dynamic,” Mr. Emerton said.
But many companies continue to hold on to strict criteria for board candidates, limiting the number of female candidates, Mr. Emerton said. It is a custom in Britain, for example, to hire only nonexecutive directors who already have a board seat somewhere else. Edward Davey, minister for employment relations, said the government might have to persuade chairmen to be less specific.
Mrs. Morrissey dismissed the notion that there were not enough suitable female candidates. At Newton, an asset management firm owned by Bank of New York Mellon, 26 percent of the senior work force is women, partly because the firm has tried to draw a broader list of job candidates and women have been attracted to working at a place with a female chief executive. Part of Newton’s strategy is to check whether companies it wants to invest in have a well-balanced management board.
However, Mrs. Morrissey said that more needed to be done to deepen the pool of candidates. She mentioned the need for senior executives to mentor more female employees and special career advisers who help women before and after maternity leave.
Mrs. Morrissey recalled how women would drop by her desk and say, “I’m concerned, I want a child, but how do I balance it?”
“They look ahead in their career and don’t like what they see culturally,” she said. “But the more women there are, the more appealing the image will become.”
Mrs. Morrissey, 44, knows what she is talking about. When she is not in charge at Newton, with about $70 billion of assets under management, she is spending time with her children and husband, Richard, who quit his job as a journalist to take care of their six daughters and three sons.
Mrs. Morrissey, who studied philosophy at Cambridge University, was not always an ambitious campaigner for greater gender diversity. She joined Newton in 1994 after the founder, Stewart Newton, noticed her talent as a bond analyst for Schroders in New York. When Bank of New York Mellon bought Newton eight years later, the new organization decided to improve equality and Mrs. Morrissey was asked to set up a women’s group.
“I slightly resisted because I felt I didn’t need that focus,” she said. “But you need to be mindful that developments in this area go in fits and starts, and I look at my daughters and see that their expectations are pretty high.”
Mrs. Morrissey said the support of male executives for her initiative was crucial. “A lot of these initiatives are just women talking to women,” she said. In fact, her own idea for the 30% Club came after a women-only lunch at Goldman Sachs last year, and the club’s other leaders include senior female executives from Rothschild, Deutsche Bank, KPMG and others.
“It is essential that senior male executives spread the word about the importance of gender balance on boards,” Mrs. Morrissey said.
Win Bischoff, the chairman of Lloyds, said the word was spreading already. “Several people approached me since I joined the initiative saying they are interested and want to join as well,” Mr. Bischoff said.
The biggest challenge for the 30% Club, Mrs. Morrissey said, was to keep up the momentum.
“The time is right and the door is ajar,” she said. “The main danger with initiatives is that they tend to fizzle out.”
