My open letters to Rt Hon Theresa May MP and Rt Hon Vince Cable MP

[Note added 17 July 2012: my joy at the government’s decision to remove the threat of quotas for women on boards was premature. The risk still remains. The government was merely objecting officially to EU-imposed quotas, but continues itself to threaten them if companies don’t increase the proportion of women on their boards ‘voluntarily’.]

Fresh from celebrations over the government’s decision to remove the threat of quotas for women in the boardroom – a matter reported in this blog yesterday – I read the following in today’s Telegraph:

The Department for Business and the Home Office said a ‘growing body’ of research was showing that ‘diverse’ boards made companies more effective.

Supporters of the Campaign for Merit in Business know this statement is a blatant untruth. In consequence, I’ve just posted a letter to the heads of the two departments officially spreading the untruth, Vince Cable and Theresa May. They’re virtually identical (the letters, not the politicians, obviously, you’d never struggle to tell them apart) and I’ll just include Mrs May’s letter here:

120529 letter to Rt Hon Theresa May MP

I shall post the responses from Mrs May and Mr Cable upon receipt (if any), along with details of ‘the growing body of research’ (if any). Please don’t hold your breath.

A small but important victory for meritocracy

[Note added 17 July 2012: It turned out I was wrong in thinking there’d been a small victory for meritocracy. After I posted the following it emerged that the government’s objections to quotas related only to EU-imposed quotas. The government from David Cameron down – and Vince Cable in particular – continues to threaten quotas if companies fail to ‘improve’ the proportion of women on their boards ‘voluntarily’. What might George Orwell have made of this abuse of the language, one wonders?]

Today’s papers bring welcome news of an important victory in the battle for meritocracy in British boardrooms. The government has made it known that it is to drop its threat to legislate for quotas for female directors in the boardroom. To what extent The Campaign for Merit in Business (‘CMB’) can claim any credit for bringing about this decision, we have no way of knowing, because the government – feminist-friendly in its senior reaches, most notably David Cameron himself – refuses to engage with us. Probably a bigger factor is the belated recognition that only a small number of women (compared with men) have the experience and expertise necessary to contribute effectively as board directors, even at the ‘gravy train’ non-executive director level.

But the CMB remains the only organisation in the UK articulating the case for meritocracy in business, and campaigning against special treatment for identifiable groups (e.g. women) at the expense of other groups (e.g. men). We know from whistle-blowers that our messages are getting across, and the government was faced with the unappealing prospect of imposing quotas for women when it’s clear that this could only damage UK plc, at a time when the economy needs all the help it can get.

Senior business people (men and women) are increasingly accepting the validity of the arguments we’re putting forward. The CBI – as these people’s representatives – should be articulating the case for meritocracy in British boardrooms but as readers of this blog will know, the organisation has caved in to feminist thinking on the matter of gender diversity in the boardroom, despite being unable to offer a shred of evidence to support its claim that gender diversity can be expected to improve corporate performance.

With the withdrawal of the threat of quotas for women in the boardroom, is the battle won? Far from it. This is a small, albeit critical, victory in the fight against ‘improved’ gender diversity in the senior levels of the corporate sector. The campaign to force more women onto boards is ideological in nature, and cannot therefore be defeated, only thwarted. One of the objectives of the CMB is to equip senior business people with the information and the resolve they require to thwart the manipulative women behind the campaign, along with their male collaborators, many of whom are ‘captains of industry’. Besides which, we have yet to see how the odious initiative spearheaded by EU Commissioner Viviane Reding will play out.

It’s presumably no coincidence of timing that the dropping of quotas was announced in parallel with the publication today of a study carried out for the ultra-left-wing Equality and Human Rights Commission (‘EHRC’). The report was drawn up by the Cranfield School of Management, which on gender matters reliably means The Cranfield International Centre for Women Leaders (‘CICWL’), long-term campaigners for more women on boards. Regular readers of this blog will be aware that CICWL is among many campaigning bodies which have been unwilling (or, more realistically, unable) to provide evidence to back up their assertions of a positive causal relationship between more women on boards, and improved corporate performance. I called the CICWL to ask for the job title of the lady mentioned in the article below, Elena Doldor, and was told by the lady on the switchboard that she didn’t know her job title, but her personal title is ‘Ms.’ Quelle surprise. Women working in the field of ‘gender diversity’ often seem to be titled ‘Ms.’ A little clue there to their left-wing politics.

My thanks to Michael Klein of http://sciencefiles.org for supplying me with a PDF of the ‘study’ in question. Enjoy:

120528 Cranfield School of Management report for EHRC

With the EHRC being so left-wing, what better paper to draw upon for an article on this topic than the Guardian? Obviously my political convictions prevent me from buying the paper but I was able to copy down the following article from today’s edition at the library. It’s basically a rehashed ‘glass ceiling’ story, as usual:

MALE ELITE BARS WOMEN’S WAY TO TOP, SAYS STUDY

The ‘male-dominated corporate elite’ occupying the boardrooms of the UK’s biggest companies is deterring the appointment of women to the upper echelons of corporate Britain, the equalities watchdog warns today. The first in-depth study of recruitment of non-executive directors by headhunters, carried out by the Equality and Human Rights Commission, finds that the men who hold the majority of seats around the tables of the 350 biggest companies listed in London tend to select new members with similar characteristics to themselves…

“The often subjective way of making appointments ends up replicating existing boards rather than bringing in talented women who bring real benefits to individual company performance and ultimately help Britain’s economic recovery,” said Lady Prosser, deputy chair of the EHRC.

It is now more than a year since Lord Davies, the former banker and a Labour trade minister, set out targets for women to hold 25% of boardroom positions by 2015, and the government is preparing to tell European policymakers that it does not endorse proposals for mandatory quotas in boardrooms across Europe…

In January this year there were 143 women in non-executive director roles in the  FTSE100 and only 20, or 6.6%, in executive roles.

The report for the EHRC, by Cranfield School of Management, was based on academic literature and interviews with 10 headhunting firms in London which had signed up to a new code. Elena Doldor, author of the report, says that headhunters needed to do more to keep women in the running for boardroom positions…

The study shows that the appointment of board members is often driven by a “homogeneous elite group of individuals at the top of the FTSE100 companies”…

Gender balance in the boardroom – a sample chapter from ‘The Glass Ceiling Delusion’

Since I launched The Campaign for Merit in Business a month ago I’m being increasingly asked by senior business people and journalists to present my core arguments against quotas and other positive discrimination measures to ‘improve’ the number of women in boardrooms. The arguments now include the evidence of two studies (University of Michigan and Deutsche Bundesbank) which show that increasing the number of women on boards adversely impacts on corporate performance.  In addition I’ve been supplying people with a chapter (link below) from my 2011 book The Glass Ceiling Delusion: the real reasons more women don’t reach senior positions and thought I should make it freely available to visitors to this blog. The book’s available from all the usual retailers and from myself – I can sign and dedicate it if you wish, and post it to any address worldwide – if ordered through my publishing website www.lpspublishing.co.uk. The chapter:

Gender balance in the boardroom – a sample chapter from ‘The Glass Ceiling Delusion’

Faking Public Opinion: how Viviane Reding abuses opinion polls for her own purpose

While the leading British culprit pushing for ‘improved’ gender diversity in company boardrooms is David Cameron – with his continuing threat of quotas – in the EU it’s Viviane Reding, a Commissioner. I am therefore grateful to Michael Klein of the German language blog http://sciencefiles.org for translating his article into English:

How EU Commissioner Viviane Reding abuses opinion polls

Financial Times piece on the appointment of female directors

The Financial Times journalist Lucy Kellaway has a fortnightly column, ‘Dear Lucy: Work problems answered’. In yesterday’s edition of the paper the ‘problem’ was: ‘Do I need to hire a second-rate woman to join the board?’The person asking the question – ‘Non-executive director, male, 58’ – continues:

I chair the nominations committee of a large company in a male-dominated sector. We have one (highly effective) woman on the board, and are looking to recruit another. In the past two months, I have interviewed more than a dozen women. I cannot see any of them adding sufficient value round the boardroom table. Do I go on looking? Take a second-rate woman just to look good? Or do what my gut tells me and take the best person, even though he’s a man?

Implicit in this is that ‘more than a dozen’ women deemed themselves fit for a board role with this company, and were – at least in this person’s judgement – wrong. They were deluded. Lucy Kellaway’s answer is intriguing. The first half of it is very sound:

Taking a second-rate woman will never make you look good, so you can forget that. Instead you should ask where this determination to hire a second woman came from. Was it to win brownie points? If so, I wouldn’t bother. Unless your company is FTSE100 or FTSE250, no one (yet) cares very much.

Or was it so that your (highly effective) woman has some company? If so, you can forget that too, as it sounds as if she’s getting on rather well on her own, and (possibly) even likes it that way.

Or was it because you recognise that you have some gaps on the board and thought that a woman was more likely to fill those? In this case if you have found a man who fills those gaps, choose him.

Or is it because you’ve been reading those surveys that set out to prove that companies with more women on their boards perform better financially? I’d be very careful of these pieces of research. It’s terribly hard ever to assess exactly what contribution is being made by non-execs, as there is so much else going on.

Did you spot the assumption that the proposed new female director would be a non-executive director? Why are campaigners for gender diversity in the boardroom not more bothered about whether the diversity relates to executive or non-executive directors? The answer is simple. Becoming a non-executive director is akin to boarding a gravy train, while becoming an executive director isn’t. It’s the workplace equivalent of marrying a rich man.

The second half of Lucy Kellaway’s answer (below) isa variant of a tired old feminist argument in this field – that male directors suffer from ‘groupthink’, and there’s something special about some women, they’re ‘in a different mould’ to use her phrase, which will bring value to a board. If this were true, don’t you think – as I do – that competitive pressures would have forced boards to recognise it decades ago, seeing that companies with more women on their boards performed better? The evidence, as we know, points to the contrary.

Yet whatever one thinks of these studies, there is one thing that can’t be denied: it is a disaster to construct a board in which each new member thinks pretty much the same as each existing member. To avoid this, hiring a woman is just the thing. Not because females and males always think differently but because such is the dash to hire women that all the obvious ones – i.e. those who think just like men – have already been snapped up. This means anyone who is recruiting now has a choice between the second-rate ones who think a bit like men, who you should avoid at all costs, and first-rate ones who are in a different mould entirely.

It’s time to go back to the headhunters and make them work harder for their swingeing fee. Tear up whatever narrow specification you gave them and tell them that you want a woman who is curious, fearless and fiercely intelligent.

It’s also time to examine that gut of yours. It sounds as if it might be the sort of gut that feels happiest when surrounded by guts of the same variety. When the headhunters find this clever, independent woman, gag that gut and hire her.

The second half of the letter may be summarised as, ‘Ignore what your judgement tells you, and hire a woman without the experience and expertise required to strengthen your board’. And so another woman boards the gravy train…

Babcock International Group PLC

Babcock International Group PLC is a FTSE250 company and a global player in engineering-related services. My thanks to Jason for alerting me to the following excerpt from their last (2011) Annual Report:

Board Diversity  We recognise the value to the effectiveness of boards and board committees of their being able to draw upon a diverse range of skills, experience and outlook from amongst their members so as to bring a wide range of perspectives to the oversight of company strategy, risk mitigation and management performance.  In order to achieve long-term success in a competitive international environment, companies need to draw upon a diverse range of perspectives and competences that are relevant in that environment. .As Babcock grows in size and complexity and increases its activities around the world this is likely to become even more important.  Diversity in this respect is very much about the personal approach, qualities and experience of individual directors and not about simply who or what they are. We note the views of Lord Davies in his Review into Women on Boards published earlier this year as to increasing gender diversity on boards and in senior management roles.  We recognise that gender, like other attributes and experience, can contribute to the diversity of perspective that we seek and that in selecting for board appointments this is something of which we need to be, and are, conscious.  That said, our overriding criterion for appointment must always be merit and the best candidate for the role. We, like others, are sceptical of quotas for the numbers of women (or any other persons based on group characteristics) on boards or in other senior management roles as they do not necessarily deliver the individuals with the best skill set or experience and can lead to tokenism.  We note that Lord Davies’ review does not set quotas as such, but encourages companies to state their aspirations as to the numbers of women on their boards and that his report (and others) recommend specific targets to be aspired to by certain dates.  We understand the good intent and motivation behind this, but believe that stated aspirations as to targets of this kind can easily become self-imposed quotas.  They also inadequately allow for the fact that companies in different sectors have different challenges in this respect. The traditional engineering sector in which Babcock primarily operates is inevitably going to find  that it is more challenging and will take longer to find women candidates with the right experience and background to move into senior management roles and board positions than those operating in some other sectors.

Corporate governance

Readers of this blog will be familiar with the dire contribution made by the CBI to the advance of the gender diversity in the boardroom initiative. But what about corporate governance more generally? Surely people with a professional interest in corporate governance should be concerned by the evidence showing that forcing more women onto boards (whether through quotas or other means) will damage corporate performance? I’ve today written to a number of leading academics in this field – with titles such as ‘Professor of Corporate Governance’ – and I look forward to their responses. With their prior permissions, I’ll publicise their responses on this blog.