Women in senior management: Are there enough women on boards?

There is a handful of high-profile women in retail – Angela Ahrendts, Kate Swann, Lucy Neville-Rolfe, Jacqueline Gold and Laura Wade-Gery to name a few. But few would deny that when it comes to the upper echelons of the industry, the men still rule the roost It’s a situation that retailers have been talking about for years, one which doesn’t appear to be changing as fast as hoped. And in recent weeks, it has become more of a talking point.

Former Asda chief executive Allan Leighton has added his support to the cause, after becoming deputy chair of women in business network An Inspirational Journey. The organisation is working with companies to encourage more women into senior positions and Leighton is leading an initiative involving chairmen of British businesses being sent a short film calling for change.

The pressure for greater balance is increasing. Spain and Norway now both set quotas for the number of women on boards, and last month Prime Minister David Cameron refused to rule out that policy in the UK.

Many retailers realise that more action is needed if they are to increase the number of women on boards up and down the country. As Morrisons group human resources director Norman Pickavance says: “For a long time the issue has been dealt with in a superficial manner. There are many organisations that have not stepped up to the plate in setting a goal. Like anything that’s important, you have got to focus on it.”

For many, the benefits of diversity in senior management speak for themselves. The Tesco plc board has four women out of 15 on it, and Tesco executive director of corporate and legal affairs Lucy Neville-Rolfe says: “Having talented women in the business is very important, and particularly helpful in a consumer company. Good teams are diverse teams.”

A Government-commissioned report on how to encourage more women onto boards was published in February, and while the advice was to avoid quotas in the UK for the time being, author Mervyn Davies said: “Government must reserve the right to introduce more prescriptive alternatives if the recommended business-led approach does not achieve significant change.”

Sally Elliott, senior partner in retail at executive search firm Korn/Ferry Whitehead Mann, says: “It’s a really hot topic at the moment and is quite a big issue because women drive so many purchasing decisions.”

Time to act

Simply paying lip service to the issue is no longer enough. Around 60% of retail staff are female and, for the grocers at least, around 70% of customers are women. But at board level, even the best performers only have between 20% and 30% female representation. For instance, Tesco’s proportion of women on its plc board is the equivalent of 27% and the grocer is working hard on continuing to improve this.

It is, of course, an issue throughout the corporate world, and figures suggest that retailers have greater levels of diversity than many other sectors. In 2010, the FTSE 100 list of the UK’s biggest companies contained seven retailers. The total number of senior female directors on the boards of those retailers was 25 out of a total of 94, working out as 27% – an increase on 2009’s figure of 22% and significantly better than the FTSE 100 average of 12.5%.

But the fact remains that gender equality at senior levels is not retail’s strongest point, despite attempts to address it. “It’s an issue for lots of companies,” says Skillsmart chief executive Anne Seaman. “But it’s a particularly big issue for retailers because such a big proportion of the work force is female.”

Best for business

Pickavance says a dearth of women in senior management could affect a retailer’s competitiveness. “There are really sound business reasons for getting this right,” he says. “We want to be in tune with our customers and make sure we represent the communities that we serve. We want this organisation to be faster paced and more responsive than our competitors.”

Retailers are starting to realise that there’s a huge untapped resource in the middle management ranks of retail, and work is beginning on developing that into future leaders. While the lack of supply of female talent is still an issue, demand in the retail industry for their skills, experience and perspective is starting to increase.

So how can retailers employ more senior women? It’s not easy – Dunelm is just one retailer to have recently asked for a shortlist that included women for a board vacancy but found the best candidate in this case was outgoing Pets at Home boss Matt Davies. And women often steer clear of the most high-powered roles after having children in their 30s, finding it too difficult to balance work and home life when the lion’s share of the childcare falls to them.

But anything worth doing is going to require effort, and there are several options for retailers hoping to improve the situation. What is clear is that a long-term drive is required. Women need to be mentored, managed properly and encouraged to apply for promotions when they are further down the career ladder. Furthermore, good maternity packages are a must.

If the corporate culture isn’t appealing to women, it needs to be tweaked – any business that wants the best applicants needs to appeal to them all.

“What we need is to encourage women in middle management to put themselves forward for senior management and board level jobs,” says Jojo Maman Bébé founder and chief executive Laura Tenison. “Some corporate environments are not conducive to women who wish to juggle their lives a little bit – have families and a work life balance.”

While not every company can adapt to the needs of busy parents, Tenison says retailers often can, especially now that the internet makes it easier to work from anywhere at any time. “Losing women because of an inflexible attitude is short-sighted,” she says. Employers must be careful not to pile too much pressure on working parents, and women must choose carefully who to work for, she says. “Retail is one area where it’s easy to do things remotely, but there’s no point complaining about working hours if you’re in an environment where someone else is working around the clock.”

Morrisons is working hard on adapting its corporate environment, having identified 100 future female leaders within the business who will receive attention, guidance and development.

Tesco is putting a similar focus on the issue. “It’s about creating a pipeline of talented women,” says Neville-Rolfe. “You need to build up leadership skills and women’s confidence.” Women-only training can help, she says, and the presence of role models is always helpful. “When I was appointed to the board in 2006 I got a lot of emails from women in the business who felt it was encouraging,” she says.

Quota concerns

One thing that most agree on, though, is that quotas won’t work. Neville-Rolfe says: “I’m not convinced it would be positive. I wouldn’t want to be on the board because I was part of a quota. It can undermine your position.” Tenison agrees: “It’s a great shame more women don’t sit at the top, but I am totally against quotas. They make a mockery of the fact that you must put the best person into the job.”

But board quotas are unlikely to trouble UK businesses any time soon and with retailers performing better on the issue than some sectors, the industry may not have as much to worry about as some. But there is a realisation that more action is needed.

While the debate surrounding gender diversity is often what gets the most attention, all forms of diversity are important and increasing the numbers of female leaders is just the first step for many retailers. As Neville-Rolfe says: “It’s not just about women – you want a range of ages, experiences, skills and people who have worked in different parts of the world.”

It all comes down to ensuring that the diversity of senior management reflects the diversity of shoppers – it’s often easiest to sell to people whose motives you understand. As Pickavance says: “Having leadership that is representative of our customers and colleagues makes us more responsive as a business.”

As with any organisational change, the message must come from the top. Strategic aims need to be communicated and targets set – genuine change won’t occur unless this happens, Pickavance says. But if the positive signs are correct, some retailers are starting to increase their focus on improving diversity.

After being something of a sideline issue for years, the talent management and strategic work needed to improve the gender balance in senior management is starting to happen.