Professor Susan Vinnicombe, the world’s leading academic proponent of ‘more women on boards’, makes a remarkable admission to a House of Lords inquiry

Regular readers of this blog will need no introduction to two of the leading British proponents of ‘improved’ gender diversity in boardrooms, Professor Susan Vinnicombe and Dr Ruth Sealy, respectively Director and Deputy Director of the Cranfield International Centre for Women Leaders (‘CICWL’). Professor Vinnicombe founded CICWL in 1999, and it wouldn’t be an exaggeration to say that these indefatigable ladies are leading lights in their movement globally. Who better, then, to stop the Campaign for Merit in Business in its tracks, by providing evidence for the long-claimed yet elusive causal link between ‘improved’ gender diversity in the boardroom, and enhanced corporate performance? Sadly, they have yet to provide such evidence to us. The reason has just become clear, and it is with particular interest that we have read the minutes of last Monday’s House of Lords sub-committee meeting on ‘Women on Boards’:

120716 House of Lords sub-committee meeting minutes

Much of the content will come as no surprise to people who follow this topic closely, and we may post a detailed critique of the report in the coming days. It seems to us from the minutes of the committee’s meetings that all 11 peers (three of them Conservatives) are supporters of ‘improved’ gender diversity in boardrooms, and all the witnesses questioned have been likewise. Indeed, many of the latter have been professional proponents of ‘improved’ gender diversity. Not a single dissenting voice has been heard. If this is democracy, I’m an aubergine. I’m reminded of the December 2010 CBI report, ‘Room at the Top’, whose 14 co-signatories included 9 women, along with five men who were already on record as being supporters of ‘improved’ gender diversity on boards.

The most interesting section of the minutes is possibly that between pages 4-7, questions 199-201. For the time being we’d just like to bring to your attention Professor Vinnicombe’s response to a question put by Lord Fearn, which I’ve reproduced below. I’ve indented the key sentences. Our thanks to Professor Vinnicombe for her integrity in making these statements. We can only hope that others (Vince Cable and Lord Davies come to mind) start to display more honesty in this area. But let’s not hold our breath, because they’d be admitting what we have long known – there is no financial case for improving gender diversity in the boardroom. And without a financial case, what is left? Nothing more than left-wing conspiracy theories, fantasies, lies, delusions and myths.

Lord Fearn: Is there a strong business case for improving the gender diversity of boards? If so, does it follow that there is also a strong business case for increased gender diversity on boards across the EU?

Professor Susan Vinnicombe: Yes. We believe that there is a very strong, compelling and comprehensive business case for gender diversity on boards, and it is a case which stands not only in the UK but across the EU and indeed globally. It sits on several broad platforms.

One is talent management. In all the developing countries of the world, 60% of the graduates are now women. We have a tremendous number of women coming in at graduate level to our big corporates. So the fact that we are seeing so few women at the top on our corporate boards is a sheer waste of talent. Talent management would be our first point concerning the business case.

Secondly, if corporates are to serve their markets well, it just makes sense that they need to be able to represent those markets. In many of the markets, women are the consumers, so it makes very good business sense to have women on the corporate boards of those companies.

Thirdly, there has been quite a push in the past – indeed, we ourselves have engaged in such research – to look at the relationship between having women on corporate boards and financial performance. We do not subscribe to this research. We have shared it with chairmen and they do not think that it makes sense. We agree that it does not make sense. You cannot correlate two or three women on a massive corporate board with a return on investment, return on equity, turnover or profits. We have dropped such research in the past five years and I am pleased to say that Catalyst, which claims to have done a ground-breaking study on this in the US, officially dropped this line of argument last September.

However, there are broader, non-financial performance indicators, such as corporate social responsibility, employee involvement, innovation, philanthropy and good communications, which have been seen to be connected to companies that have women on their boards.

We need to talk about Vince Cable

It seems I was premature in declaring a small victory had been won in the battle against the ideological goal of ‘improved’ gender balance in the boardroom. I’d inferred from broadsheet newspaper reports that Theresa May, Home Secretary and Minister for Women and Equalities, had written to EU Commissioner Viviane Reding opposing EU imposition of quotas for women in the boardroom, that this was the government’s revised domestic position also. I was wrong, it now seems. I’m grateful to Fred for pointing me towards the following article on yesterday’s Mail Online. It concerns the coalition’s ultra-Leftie Business Secretary, and the piece is titled, “Firms face compulsory quotas if they don’t put women in top jobs, insists Vince Cable”:

Businesses could be hit with compulsory quotas to increase the number of women on boards unless they raise the number voluntarily, said Vince Cable. The Business Secretary said he was ready to introduce legal targets if firms had failed to ensure a quarter of executives at board level were female by 2015. He also suggested that if he were prime minister, half of the Cabinet would be women.

More women should be promoted in the boardroom under guidelines being pushed by The Business Secretary. Mr Cable said there were encouraging signs that firms were beginning to heed calls for gender equality – revealing figures suggesting that in the past three months, half of new appointments to FTSE company boards have been women.

He said he planned to ‘name and shame’ companies that fail to make further progress. One in ten of Britain’s biggest firms still has all-male boards. ‘It’s very, very important that women are there in numbers,’ Mr Cable said. ‘Our objective is to get a quarter of all board membership being women by 2015. Our current approach, which is trying to change the culture, trying to name and shame, I think will work. If it doesn’t, we can look at things like quotas. There is a body called the Financial Reporting Council that requires companies to declare publicly what they do. So companies will be in the future publicly identified and there will then be a role for me to go out and say publicly, “This is a disgrace, you should change your behaviour”.’

Asked whether he would introduce quotas if that approach failed to deliver the target figures, the Business Secretary said: ‘I would, yes. I think that’s a perfectly legitimate last resort. But I think the current approach that we have adopted is beginning to produce serious results, so let’s give it a chance.’

The EU has announced a consultation on how to increase women’s presence on corporate boards, warning that progress towards equality is too slow. Mandatory quotas are being threatened if member states fail to make sufficient progress. The EU’s Justice Commissioner, Viviane Reding, has warned that on current rates of change, it will take more than 40 years for women to hold 40 per cent of board positions in Europe’s publicly traded companies.

In Britain, companies are working towards a voluntary target to increase the percentage of women on FTSE 100 boards to 25 per cent, up from 12.5 per cent last year. But business leaders have warned against compulsory quotas. On BBC Radio 4’s Woman’s Hour the Business Secretary also took a swipe at David Cameron’s failure to meet an aspiration that a third of his ministers should be women. There are five women – all Conservative – in the Cabinet.

In a reference to the new French president’s decision to make half of his top team female, Mr Cable said: ‘If I ever finish up in Mr Cameron’s job, and who knows what could happen, you might well get a Francois Hollande moment.’

Meanwhile, Tory MP Peter Bone demanded that Vince Cable be sacked from the Cabinet after it emerged that the Business Secretary was in contact with Labour to discuss a possible alliance following the next election. At the weekend it was revealed that Mr Cable had held phone conversations with Labour leader Ed Miliband.

The appointment of a noted Leftie to such an important position, and the fact he’s still there, are indicators of how left-wing and feminist-friendly David Cameron is himself. I was warning of this two years ago, and herewith give you a chapter titled, ‘David Cameron: heir to Harman?’ from The Glass Ceiling Delusion:

120106 sample chapter from ‘The Glass Ceiling Delusion’