Diversity: Change Business And Boardroom Structures To Reflect Changing Needs

It is fashionable to embrace innovation in business circles in 2019, and yet UK business often appears surprisingly resistant to change when it comes to business structure and procedure. It’s not hard to see why - by definition, change means a shift in the status quo, which is likely to mean a displacement of those currently in positions of power and leadership. Throw the word ‘gender’ into those statements, and you see why we are where we are on the progression of women.

If, to get more gender diversity in business, we need to achieve culture change - see my latest Governance Watch - it is worth noting a recent report by Credit Suisse, which offers practical and immediate steps to move the needle.

In 2019, we are markedly more sensitive to the fluidity of gender identification. But androgyny was looked to a long time ago by the ancient Greeks as an ideal, at least in terms of the human form as depicted in art. Business today needs to evolve faster, move outside long established parameters of ‘belonging’ and recognise and welcome all aspects of human fluidity. Because in fact, they are part of what represents real neurodiversity, across gender, age and background.

Lifting the number of women into senior management and non-executive positions in UK business is an obvious place to begin on grounds of equality, better corporate governance, and the need for diversity - simply because they constitute half the population. But if we do not progress faster with this hurdle, it seems unlikely that minds will be open enough to tackle what is needed for real change.

In its report, The CS Gender 3000 in 2019: The changing face of companies, the Credit Suisse Research Institute (CSRI) finds interesting regional differences by geography when it comes to progress on gender diversity. It also looks at the role of mind-set, and the impact of regulation. North America, for example, “doesn’t have regulatory pressure, but has seen the greatest improvements” says the report. Both North America and Asia-Pacific as regions reflect greater gender diversity in management than Europe, despite Europe having higher diversity on their boards.

“Companies with more diverse management teams have generated sector-adjusted outperformance approaching 4% a year compared to those displaying below the average” it finds, saying that contrasting levels of gender diversity “still appear more a function of country, culture and regulation than being about industry stereotypes.” Where there has been progress - and it finds that from 15.3% female board representation in 2015 globally it is now 20.6% ,“the acceptance of merits of improving diversity has driven change” says CSRI.

As ways of moving the needle faster, it suggests three arithmetic routes forward. They are:

• Replace a male director with a female director, while keeping the size of the board changed

• Add a female director to the existing board, but increase the board’s size rather than replacing a male director

• Remove a male director from the board without a female replacement and reduce the board’s size

Source: Credit Suisse Research Institute (CSRI), Credit Suisse EMEA, London November 2019

Why not change the structure and numerical composition of UK plc boards to reflect changing needs ? It would be an opportunity to align performance measurement and recruitment, giving the much-ignored (and often female) HR function more acknowledgement. (see Board Talk, 2017).

Businesses are certainly thinking harder on many commercial fronts on other issues - the deciding factor is clearly being open to change.

Two examples come to mind. KPMG is to cut a tenth of its UK partners by Christmas following a review of individual performance, the Financial Times reports this morning. And the paper recently carried an opinion piece by Pilita Clark on the “archaic way in which people are paid” - Unilever’s new experiment in changing pay structure.

These are welcome signs of change and innovation. But it took years for the finger of blame in the lack of progress in female appointments in non-executive roles to boardrooms (during the UK Government’s 2011 drive around the Davies Review) before anyone started seriously to consider the role of the headhunters, those at the front line of recruitment and appointments. Established networks, long-term relationships between Chairs and headhunters, and a lack of focus in boardrooms with closed minds were all to blame.

Despite all the hype since 2011, the same boardroom structures, procedures and the recruitment process - with the determination to rely on ‘networking’ within established lines exist. Should they share a large portion of the blame for the stall in progress, or is it just all a bit chicken-and-egg until we are willing to acknowledge the need to think differently across business circles?

There are ways in which boardrooms around the world are changing, and collaborating in the exchange of ideas via circles of corporate governance. James Harley, Director Nasdaq Governance Services, shared this interesting post the other day on social media - from the Australian Institute of Company Directors on the future of board meetings. Are UK boardrooms listening ?

When it comes to neurodiversity, there is a long way to go - although tackling the gender issue is an important start.

On one level, in respecting and embracing human ‘fluidity’ I mean individuality, but it’s more than that. It’s an active awareness that good ideas do not always come through the usual means, via the established dress code, expressed in a way that is uniform. Clever people often do not conform on expression and articulation -but that makes them neither less clever, nor worthy of dismissal. If you don’t want groupthink, accept that communication too, is rarely best delivered in a uniform manner. Just think how there are some who still cling to their Powerpoint presentations.

The 16 year old female Swedish climate activist, Greta Thunberg, has woken up the whole world on the all too real threat of a climate emergency. But because she has herself embraced her Asperger’s label, there are many who will immediately dismiss her, just as I have heard smart public school kids in Britain a little too close to home scorn those with ‘special needs’ - which would in fact cover anyone on the spectrum.

In reality, many of us are probably somewhere on that spectrum - it is just that we are not aware of it. Read about the important work by Simon Baron-Cohen.

“Brains come in different types and they’re all normal. What we want is that one day every workplace will be diverse – we already encourage that with gender and ethnicity, but the next frontier is neurodiversity and it will become ordinary. People won’t think twice about it” he tells The Guardian in that report.

We need more neurodiversity in our boardrooms. If female representation is a step to that, it becomes even more urgent. In this opinion piece for the Financial Times, Simon Kuper has some valuable insights to take this idea further. By using ‘beautiful minds’ in the headline, the piece had divided readers before they even started to read it. I think those who read headlines - or tweets- and form opinions based on them do not always get the message. So don’t do that - read the entire piece.

From his description of the ‘eight habits of the highly intelligent’ the thought jumped out at me (and you will see my expression of it on the FT Facebook page which I peruse, but never comment, as on most public Facebook pages except my own) : these are the people we want in our businesses setting strategic direction.

But to do that British business needs to stop valuing conformity over intelligence in a fast-changing world.

Main image credit: David Matos : brain. Model early 20th c. via Unsplash.