Women are key in boardroom battles
The Jewish community has recently been going through one of its regular bouts of angst concerning the lack of women in leadership roles. But it should not think it is alone. The general business sectors face the same problem.
The Treasury recently embarked on a major search to fill one of the external seats on the interest rate setting Monetary Policy Committee (MPC) of the Bank of England, following the departure of Adam Posen to head the Washington think-tank, the Petersen Institute.
It eventually came up with a list of 29 economists of which seven were women. In the end it chose Ian McCafferty, chief economist of the employers group the CBI. The result is that the nine-member committee, chaired by the Governor Sir Mervyn King, remains strictly a male preserve with no women members.
This is a step back for a Monetary Policy Committee (MPC) that at one stage boasted three women; the deputy governor Rachel Lomax and economists Marian Bell and Kate Barker. If the Commission on Women in Jewish Leadership were in charge of rating the MPC, one of our most important national institutions, it would not come near to getting a kitemark.
Indeed, businesses seem to struggle with many of the same issues concerning the involvement of women as the Jewish Community. Under European Union rules that are currently being debated, Britain would be required to set a quota under which 40 per cent of the boards of quoted firms would have to be made up of women directors.
Getting to that figure in a UK business and financial community dominated by male elites and testosterone looks to be a mammoth task.
Some of our most successful companies in the UK are now currently run by women and several of them have done a terrific job in encouraging other women to reach the highest level. Among the biggest achievers is Marjorie Scardino at Pearson, the publishing group behind the FT newspapers and Penguin books.
Under her leadership a company that was once regarded as a resting place for establishment figures has been transformed. Old-style businesses, including stakes in the investment house Lazard and the Madame Tussauds, have been jettisoned and the group has developed into a world leader in education. To her credit, Scardino promoted a series of powerful women to senior positions, including finance director.
Perhaps, more understandably, the same can be seen at luxury fashion house Burberry, in its old guise a dull, male-dominated raincoat manufacturer on the fringes of the late Sir Isaac Wolfson’s GUS empire. As a stand-alone enterprise run first by Saks 5th Avenue émigré Rosemary Bravo and in the past few years by another American woman Angela Arendts, Burberry has become one of the UK’s most successful companies, conquering Asia and overtaking Marks & Spencer in terms of its stock market value. As is the case at Pearson, Ahrendts also has encouraged women executives, such as chief financial officer Stacey Cartwright.
It is possible for women to make it in even the most macho sectors such as mining. Another North American, Cynthia Carroll, is chief executive of Anglo-American that for decades was dominated by male descendants of the Oppenheimer clan. The truth though is that businesses struggle with recruiting women.
There is a theory for instance, that if there were more women in the City of London then the combative, competitive spirits that produced the sub-prime mortgage crisis, the LIBOR scandal and the pay arms race in the banking sector and across the nation’s boardrooms could be restrained.
Unfortunately, it does not always work like that. The person who signed off on Bob Diamond’s notorious pay awards at Barclays is Alison Carnwath, a former executive of the collapsed brokerage firm MF Global group. She is among a cadre of Barclays directors likely to be replaced in the coming months.
The man tipped to take over as the next chairman of Barclays, Sir Michael Rake, currently chair of BT and easyJet, believes that if there were more women on the boards of banks it could change the culture.
Commenting on the issue, he told a recent House of Lords hearing: “It would be better as a matter of diversity and overall effectiveness of boards if we can get more qualified women onto boards of banks.” One of the obstacles, he suggested, was a requirement that members of bank boards have banking qualifications.
“We need to ensure that within that process we allow some diversity of board membership,” he said.
The small number of women involved at the highest levels in finance makes it harder for fellow directors and shareholders to displace them even when things go wrong.
Financier Nicola Horlick for instance has long been branded as a “superwoman” in the press but her record as an investment fund manager has been somewhat disappointing.
Similarly, Katherine Garret-Cox of Alliance Trust, nicknamed “Katherine the Great” by the financial press, finds herself under constant fire from activist investors. But she remains in place because of a reluctance of male colleagues to pull the trap door from underneath one of the more prominent women in finance.
Generally speaking, American women, such as Ahrendts, Carroll and Scardino, have done a better job of rising to the top of British companies than their UK counterparts. Similarly, they are doing extraordinarily well in the US boardrooms with Irene Rosenfield of Kraft, conqueror of Cadbury, one of the most respected bosses in America.
In technology, Meg Whitman is transforming Hewlett-Packard and Sheryl Sandberg has become the acceptable voice of Facebook on Wall Street. In Norway, Denmark, and across the Nordic countries many boardrooms now have as many women as men.
Britain’s tendency towards cosy male networks, reinforced by the St James’ club scene, outings to Twickenham and the like, has militated against gender change in the boardroom. Breaking down barriers in social settings and in the third sector, such as communal organisations, could well ease the transition in the boardrooms.
Alex Brummer is City Editor of the Daily Mail and author of Britain for Sale, published by Random House
‘The truth is that businesses struggle with recruiting women’