Why we must never, ever introduce quotas for women on boards

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The drop in the number of women being appointed to FTSE 100 (FTSE: ^FTSE - news) roles is not worrying. The call for mandatory quotas is, writes Louisa Peacock

The women-on-boards agenda is fast turning into a meaningless numbers game. When Lord Davies, the former Standard Chartered (Other OTC: SCBFF - news) chief, first urged companies to boost female board representation two years ago, he did so out of a business need to increase the effectiveness of decision-making at the top of Britain's biggest companies. This was not about diversity per se, but of a clean, cold argument that companies would perform better with more balanced boards.

The former trade minister set a target that by 2015, women should make up 25pc of all board posts at FTSE 100 companies, up from 12.5pc in 2010. At the time, this didn't seem that taxing (it's still only a quarter of the roles, as opposed to a target of half which would surely, to any sane person, be a more logical goal?)

Since then, Lord Davies has told me that his 25pc target is tougher than he thought. It is, in fact, taxing to achieve 25pc. There are a myriad of reasons for this, some of which I get into below. But first, it's important to recognise that these "reasons" for the lack of women on boards are only now being understood properly, and more to the point, are being taken seriously and tackled by most FTSE 100 chairmen and boards.

It is these reasons that we must focus on - not the target itself - if we are ever to crack the boardroom glass ceiling for women.

That's why reacting to today's news that progress has stalled with a call for mandatory quotas is blind, and misses the point.

Frances O'Grady, the new boss of the union group TUC, has urged the Government to introduce mandatory quotas. Otherwise, female board appointments will remain a rarity, she says. Progress is disappointing and too slow otherwise, she says.

But quotas would not address the real issue. As we've seen in Norway, where mandatory quotas have substantially increased the number of women at the top, there are far and few women just beneath board level and therefore little females set up to replace them when they leave. Quotas have become a sticking plaster to the real problem.

Understanding the problem

There are three very real reasons which have prevented the number of women on boards increasing fast. None of them point to quotas being the best solution; not to mention the very dreadful prospect of tokenistic appointments being a bad, bad thing for society, companies and the women themselves.

1. We need better childcare tax breaks for mothers to help them return to work and pick their career up where they left off. Quotas at the top of the organisation doesn't address this "pipeline" of talent which leaks dry.

2. Chairmen and companies need to cast the net wider for female talent . The women are out there already; headhunters and companies must look harder. Quotas has nothing to do with this.

3. Companies must develop and mentor their own women to help them rise to the top. As part of this, more women need to come forward, go for opportunities, believe in themselves. Lean In , as Sheryl Sandberg, the chief operating officer of Facebook calls it. Again, this is to do with the so-called "executive pipeline". Quotas at the top are nothing to do with this.

Today, two years on, just 17.3pc of FTSE 100 roles are occupied by women. This shows progress has been made more women are getting board posts but there's still some way to go to reach 25pc. Still, Cranfield thinks we can get there, if momentum picks up a little.

Not about numbers

But so what? The more worrying statistic in today's report, which Cranfield agrees with, is the lack of women being appointed to executive committee roles, the lack of female promotions at senior management level and the general lack of development for mid-manager women. This is the hardest nut to crack women's path to the top. It's no use putting them there, or seeing a political push to put them there and reaching 25pc, if in a few years' time, we realise that hasn't trickled down to all levels in the workplace.

The Cranfield report tries to make clear that companies must focus on the so-called executive pipeline, as well as change what some have called "conservative" and "generational" attitudes to what makes a good board leader, but the myriad of statistics and percentages that come alongside the report make it difficult to see the wood through the trees.

At the same time, the Business department's press office has put out its own press release on the women-on-boards agenda the very same report which quotes different statistics to Cranfield. For example, BIS says the number of all-female boards in the FTSE 100 now stands at 94, not 93 as Cranfield suggests. This is because the Government is measuring things from March 2013, whereas Cranfield is doing so over the last six months. This left me questioning which statistics to report from yesterday, before the report even came out. A numbers game indeed.

The point is, if we are to crack the women on boards tough cookie, then we cannot get too caught up in numbers and statistics. The Lord Davies voluntary target is just that; a benchmark, a goal, and isn't something to obsess over.

To put a sticking plaster over the real reasons why women aren't "making it" as much as they should be won't help anyone.