Increasing representation of women on private sector boards in Scotland

Case Study H

Background

The company is in the food manufacturing sector. It has 586 employees with the majority located in Scotland on a range of sites. The workforce is approximately 60% male and 40% female. There are ten individuals on the board and one of these is female. Eight of the directors are executive directors and the remainder are non-executives.

Despite this imbalance, the company recognises the benefits of gender balance and broader diversity. Their board is diverse in terms of skills and age with a wide age range among the directors. More generally equality and diversity are extremely important to the company because they want to be seen as an equal opportunities employer as they have a diverse workforce. They believe promoting equality and diversity leads to better employee engagement and communication and more tolerance. This improves employee relations and in turn creates better working conditions for the entire workforce. Supporting equality and diversity is part of the company‟s core values. At senior management level there is growing awareness of how having equality and diversity can bring benefits for the business including increasing creativity and innovation as diverse groups make the best decisions. This in turn creates a commercial imperative for diversity as it will help the company to be more forward looking and successful. It also fosters a culture of engagement which can lead to better employee relations, lower staff turnover and greater productivity. It also has a positive impact on the company‟s profile.

They believe it is the responsibility of companies to improve gender balance and broader diversity. Board members and senior managers should lead by example and drive the idea that equality and diversity are important from the top down. However they recognise that not all companies view diversity as an important issue so there needs to be some external pressure on boards to consider this. Companies should be required to report on gender pay gaps and how many women and people with other protected characteristics they have on their boards.

Challenges around Achieving Gender Balance on the Board

The main barrier to achieving gender balance is the difficulty they have finding female potential board members. This is a problem across their industrial sector as there are generally fewer females in management and board positions. Within the industry, there is a need to encourage more women to think about aspiring to boards and to think about this earlier in their careers. In their experience, women are less likely to put themselves forward for board positions as they are more likely to question their ability to do the job compared to males. They need encouragement to consider going for a board position.

They have tried to recruit more female board members in the last 5 years but despite a thorough and lengthy process (discussed in more detail later in the case study) to try to find female candidates, they have had few coming forward and male candidates have generally been of higher quality. They would like to see more female candidates applying for board positions, but feel that this may mean they do not get the skills and breadth of experience they need for their board. The issue is a circular one: having more women on the board could enhance their reputation in the recruitment market place which might in turn attract more women looking for a management position as they would see that there is a possibility for promotion.

Company Policies and Practices

The company has taken a number of steps to enhance equality and diversity and achieve gender balance in the company including on the board. These include the following.

Promoting Equality and Diversity

The company has a range of policies to support equality and diversity including a diversity and inclusion policy, a flexible working policy and an equal opportunities policy. These cover managers and employees. At the most fundamental level the company‟s values of respect, integrity, trust and excellence should inform the behaviour of the whole workforce and shows how they can expect to be treated and in turn how they should treat others.

They also put employees through diversity training. When recruiting for senior position they specify to the search companies that they would like to have candidates from diverse backgrounds and different genders although the search companies find it difficult to identify female candidates. They feel that they could do more to raise awareness of unconscious bias among senior managers as this has a profound impact on underlying assumptions which in turn influences decision making. Tackling this could help support progression of people through the organisation to increase the pool of internal candidates they have for senior positions.

The company is seeking to develop the culture of the company so that it is a fundamental expectation that all employees will be treated with respect. They believe this will reduce staff turnover, achieve better productivity, attract better candidates when they are recruiting and this in turn will increase the quality of their management candidates.

Introducing Flexible Working: They also have a number of practices that support people achieve a work - life balance such as flexible working policies, and arrangements to work from home. If women take time out of the labour market to have a family they do not have the chance to develop breadth of experience and this can help to mitigate this by retaining female staff.

Promoting Equality and Diversity and Increasing Gender Parity on the Board

Changing gender profile of our business leading to more females in senior management positions: In the light of difficulties identifying quality candidates they feel that the best approach is to develop their own talent. They aim to increase the diversity of the workforce at the entry point and then develop their own people to give them the capabilities to become senior managers and eventually progress onto the board.

A number of initiatives have been put in place to achieve this. For example, they have established a leadership programme for people who they feel have potential to be senior managers. This is a diverse group in terms of gender. They recognise that each of the people on the programme will need individualised support to address their particular developmental needs and so the programme provides a mix of group activities and individual support through coaching. This should help to develop their internal pipeline, and although it is not tackling gender imbalance overtly, they feel that they will achieve greater balance as an indirect consequence of the programme as women are being supported through it.

Feedback from participants indicates the programme provides good developmental opportunities, helps give managers better insight into their performance and ways of working, and provides a good base to progress. Nevertheless they feel they would need to provide more specific training for people to progress onto the board which would involve helping them develop more commercial awareness and financial skills as a greater depth of knowledge of these aspects of business is required by board members.

An interview with a female manager indicated there are still some perceived barriers to board membership. For example, this manager was interested in being a board member but now did not think it was realistic because she has caring responsibilities outside of work and these have changed her priorities as well as limited the time she feels she would need to devote to being a board member. She perceived that the board members have to work long hours and she is not able to work more than full time hours. She does not believe that she faces other barriers as she feels she has the skills and abilities to be a board member if she was on an internal pathway. She has not taken part in any networking or support events as these tend to be in the evening and she is not available at that time - the perception is that these are not very accessible.

Processes for recruiting new board members: They use an executive search agency to recruit new board members. When recruiting the main skills and attributes sought include expertise in relation to the role they will play on the board, emotional intelligence, sharing the company's values and having the right cultural fit and leadership qualities. It is very important that the candidate is able to take a broad perspective on the issues facing the company. When they tried to recruit recently fewer than 10% of the candidates were female and the gender balance of the board has stayed the same over the last 5 years. The main difference between male and female candidates was that the females tended to have a narrower breadth of experience and were less willing to re-locate or commute to Scotland. This is not to say that there are no women in the industry with the skills and experience required. The current female board member has been on the board for 6 years. She was invited to join the board around 5 months after she joined the company as a senior manager. At the time the board was seeking someone with specific expertise around managing people and the board member had this experience. However, she had been a board member elsewhere so had broader previous experience which was also important for the board and helped secure the position. The broader experience included being a chartered company secretary and a strong understanding of corporate governance and the role and responsibilities of a company director. She was keen to join the board and saw it as an opportunity and a challenge. However, more generally they feel the food manufacturing industry is not attracting female talent and this is having an impact on the number of quality female candidates being promoted to senior management and joining boards.

Setting Targets: They have no diversity targets for the workforce, senior management or the board. However, the monthly board report contains information about gender balance and some age characteristic and whether employees are part of the UK or non UK workforce at a company level so there is some monitoring of some characteristics. This is only reported at the board level.

Interventions and Support

The company has engaged with the Scotland Food and Drink Skills Academy which offered a number of programmes with Women in Work funding as there was a realisation that women are underrepresented at senior level in this industry. Women in their production management and farming parts of the business were supported to undertake women in leadership programme. The feedback from the participants was positive and they reported that the course had increased their confidence in their own capabilities and confidence to take the next step in management. It also changed their immediate managers' views about their role and abilities. However, the funding for this was only short term.

Key Points

1. This company sees achieving gender balance and broader diversity across the company as a whole and in the board as an important issue that can lead to better employee engagement and communication which can, in turn enhance employee relations. Diversity also brings business benefits increasing creativity and innovation and better decision making, greater productivity and a positive impact on the company‟s profile.

2. The main barrier to achieving gender balance at board level is a difficulty finding female potential board members. This is a problem across their industrial sector as there are generally fewer females in management and board positions. They have found it difficult to recruit females with the skills and experience they need.

3. The company has implemented a number of policies and practices to enhance equality and diversity including implementing equality and inclusion polices, introducing flexible working, encouraging more females to apply for senior management positions and supporting females on their internal pipeline.