House of Commons: Business, Innovation and Skills Committee inquiry into ‘corporate governance’

In 2012 – a year before the launch of J4MB – we launched Campaign for Merit in Business (‘C4MB’). C4MB was then, and remains to this day, the only organization in the world campaigning against government initiatives to bully companies into increasing the proportion of women on their boards, primarily for two reasons:

  • the initiatives are deeply anti-meritocratic; and
  • evidence clearly shows a causal link between increasing female representation on boards, and corporate financial decline (link below)

In 2012 I presented written evidence to House of Commons and House of Lords inquiries. Along with the renowned sociologist Dr Catherine Hakim (the originator of Preference Theory, in 2000) and Steve Moxon (author of The Woman Racket, published in 2008) I gave oral evidence to the House of Commons inquiry on 20 November 2012, four years ago to the day – here (video, 56:49).

I presented some of the evidence of a causal link between increasing female representation on boards, and corporate financial decline – five longitudinal studies – to both inquiries. The MPs and peers didn’t dispute the evidence, had no counter-evidence (many witnesses to the inquiry were mis-representing correlation as causation, as they do to this day) but pressed on regardless with the government’s bullying of large companies to ‘improve’ gender diversity on their boards, through the threat of legislated gender quotas.

The government’s bullying of FTSE100 companies to appoint more women to their boards – starting with the publication of the ridiculous Davies Report (2011) – led to FTSE100 companies doubling the proportion of women on their boards between 2011 (12%) and 2015 (25%). 96% of the new female director appointments over the period were as non-executive directors, giving the lie to feminist claims of a ‘glass ceiling’ keeping able women out of boardrooms.

Today the government is driving FTSE350 companies to have gender parity (50/50) on their boards. To their eternal shame the business sector – along with the CBI and Institute of Directors – have been complicit in this feminist-driven social engineering exercise. I cannot recall one FTSE350 director ever publicly criticising the initiatives.

As a result of frustration at the government’s refusal to engage with rational arguments, I launched J4MB in early 2013, and I’ve devoted little time and effort on C4MB since then. The government’s refusal to engage with rational arguments is, of course, apparent in other areas relating to state actions and inactions concerning men (and boys) and women (and girls).

It is with a heavy heart, then, and a deadline of 26 October, just six days away, that I’ve started work on our written submission for the new inquiry, having put it off for some weeks. The scope of the inquiry:

The Business, Innovation, and Skills (BIS) Committee has today launched an inquiry on corporate governance, focussing on executive pay, directors duties, and the composition of boardrooms, including worker representation and gender balance in executive positions. [my emphasis]

The BIS Committee inquiry follows on from the corporate governance failings highlighted by the Committee’s recent inquiries into BHS and Sports Direct, and in the wake of commitments from the Prime Minister to overhaul corporate governance. [my emphasis]

We knew it wouldn’t be long before Theresa ‘this is what a feminist looks like’ May reinvigorated the ‘women on boards’ initiative. The inquiry’s terms of reference include the following ones relevant to ‘composition of boards’:

  • What evidence is there that more diverse company boards perform better? [Answer: none, at least with regards to gender. The only evidence of a causal link is that when more women are appointed to corporate boards, financial performance declines. ]
  • How should greater diversity of board membership be achieved? What should diversity include, e.g. gender, ethnicity, age, sexuality, disability, experience, socio-economic background? [The assumption is that greater diversity should be increased, when to my knowledge no evidence supports the assumption, at least with regards to gender. And it is only the gender issue which will achieve traction, because it’s women who have historically and shamelessly pursued self-advancement onto corporate boards.]
  • What more should be done to increase the number of women in Executive positions on boards? [Again, the assumption that ‘something should be done’, only ‘what’ should be done being up for debate. The obvious answer to the rhetorical question – to increase the number of women in Executive positions on boards, more women will need to work harder in the relevant disciplines e.g. Finance – isn’t even considered as an option.]

Extracts from the same web page:

Chair of the BIS committee, Iain Wright MP, (L, Hartlepool) said:

“…The Prime Minister has spoken of workers representation on boards. We want to examine what this might look like in practice, how would this work, how would workers be selected? It’s all too clear that there is significant under-representation of women in executive levels. We’re interested in hearing about the barriers to women achieving senior positions, the measures being taken to remedy the situation, and what action Government might take to improve the gender balance.

Simon Walker, Director General of the Institute of Directors, said:

“The UK has long been a leader in promoting high standards of governance, with our Corporate Governance Code being copied across the world. But the reputation of corporate Britain has not recovered from the financial crisis, and there are important questions that need to be addressed on issues including transparency, executive pay and board diversity. The Prime Minister has made clear that company boards are in her sights, so directors must fully engage in this debate.” [my emphasis]

Inquiry background

Composition of boards

Following the Davies Review, which successfully focussed on increasing the number of non-executive directors, [note: this is a naked mis-representation of what happened. At no time was it ever stated that the objective was to increase the number of female non-executive directors. This is a post-hoc rationalisation of the fact that virtually all the female director appointments were as non-executives, such was the shortage of suitably able women for executive positions] the BIS Committee wants to examine what more should be done to increase the number of women in executive positions… The inquiry also wants to consider how greater diversity of board membership could be achieved.

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