Women in the boardroom

SHELLY ANN MOHAMMED, head of ACCA Caribbean

Recently, our chief executive Helen Brand gave a speech at an event about women in governance. The timely and relevant topic was Why we need more women on boards.

For ACCA, changing culture is crucial to correct the under-representation of women on boards. There is a commercial, reputational and ethical imperative to make this happen, especially as the Forbes 500 list of the world’s biggest companies reveals that only 41 have CEOs who are women. That’s just eight per cent.

The picture is patchy around the world. In a study of leading economies by the Catalyst group, which advises businesses on advancing the inclusion of women in the workplace, France has the highest ratio of female directors. Forty-four per cent of board members were women. That’s partly because France has had a legal quota for women on boards since 2010.

At the other end of the scale, Japan reported just eight per cent of women directors. Interestingly, the study also showed an increase in women’s representation in every country, sometimes small, but an increase nonetheless.

Slow, perceptible change is happening – and this is down to cultural change. There is now a wider acceptance that women should have equal access to opportunity as men in their work – including in the boardroom, if that’s where their ambitions and skills take them.

Old attitudes which discriminate against women are increasingly viewed as outmoded, outdated, and in some jurisdictions illegal. It has taken a generation to break down these views and challenge the status quo.

The best businesses know that to ignore the rights of women to claim equal opportunities to men is to risk serious reputational damage. In that sense, the right of women to take the place which their abilities deserve is a business issue as much as it is a moral one. Far-sighted companies are increasingly aware that to stay relevant and respected, they must accurately reflect the aspirations and the attitudes of all their stakeholders, which includes investors, customers and staff.

There is also growing evidence in recent years that more women on boards equals better financial performance.

A McKinsey report in 2018 based on results from 1,000 companies across 12 countries showed a link between numbers of female executives and profitability. It ranked the firms according to numbers of women on their executive teams.

It concluded that the top quarter were 21 per cent more likely to make above-average profits in their market than the bottom quarter, and that the difference was consistent across the world

In other words, the report found that having gender diversity on executive teams positively correlated with higher profitability across geographies.

But what about targets and quotas? Over recent years, there has been a long-standing debate about their use. They can certainly highlight inequality, but lasting change comes from altering cultural attitudes. It’s about building a respect for gender equality – equality for all people – into a business’s strategy.

Communicating these values clearly, and living them, are essential. While quotas and targets can be important to jump-start change, they can also be removed as much as granted.

Another huge change factor in this issue has been the pandemic.

Covid19 has altered the world forever, with its effects reaching into every corner of life. It has raised questions about how we live our lives and how we do business, and that includes the issue of gender equality at all levels of the workplace.

At ACCA we commissioned a global survey into the impacts of the pandemic on women especially, and it was clear that it was disproportionately more damaging for women, both economically and socially. Our report in March this year, Gender Responsive Budgeting, brought a valuable female perspective to the crisis. For women, it has been a story of job losses, a surge in the burden of unpaid care, and increasing economic dependence on men.

The pandemic has also accelerated businesses’ realisation that boards need new skills, attitudes and voices to make sense of the new reality of a post-pandemic world. That includes qualities which aren’t necessarily exclusive to women, but certainly don’t exclude them either – communication skills, diverse expertise in climate change and sustainable finance, health and safety, digitalisation, data privacy and important cognitive skills such as decision-making and problem-solving.

Accountancy is an increasingly popular career choice for young women. The majority of our students – 59 per cent – are women. I think this is in part down to the result of more than a century of dedication to equality.

ACCA was founded in 1904 to open up the opportunity to become a professional accountant to people who had been excluded from professional life – including women. We were the first professional accountancy body in the world to admit women, and our first female member was Ethel Ayres Purdie.

For us, Ethel Purdie represents far more than a footnote in a history book. We remember Ethel every March, on International Women’s Day, when we dedicate special events to her memory. That is a living legacy, and it shows that ACCA has always, and will always, promote the values of fairness and gender equality.

So how do we get more women into the boardroom? As mentioned earlier, it’s about culture. It’s about building a respect for gender equality, equality for all people, into the DNA of business and organisations. It’s about communicating diversity and inclusion values clearly at every level, and it’s about making them strategic and measuring them.

Mentoring also has a crucial part to play. The leaders of today can make a major contribution by offering guidance and support to the women leaders of tomorrow. Mentors can play such an important role in amplifying the positive and drowning the negative.

It is this breakthrough in culture and in attitudes that will change women’s prospects of reaching the boardroom. The landscape will surely continue to modify – and it will change because if organisations want to survive, they cannot afford to ignore the talents of half the world’s population.