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A third of senior executives dismiss merits of gender diversity

New research from interim management and executive recruitment

specialist

Executives Online shows that while 71 percent of top executives believe gender diversity in the boardroom is always a good thing, nearly a third (29 percent) of all senior executives doubt its value altogether.

boards to assess ABC proposals which may make the implementation process more straightforward, perhaps encouraging more companies and trustees to consider these structures.”

Twenty-three ABCs have been made in the past year with a total value of nearly £2bn. This is a significant increase in activity compared to last year, when seven new structures were put in place. Prior to the start of 2013, a total of 29 ABCs had been made in the market, so this year has seen that almost double.

ABCs are increasingly being used by smaller schemes, with the average deficit met falling to around £80m

(compared to c. £100m over 2011/12). Seven of the new structures over 2012/3 had a value of £25m or less, whereas previously only three structures of this size had been implemented.

Property remains the most popular asset for ABCs, although 2013 has seen a significant increase in the use of intra-group loans. This can allow companies to use ABCs even where there are restrictions over the transfer of assets or where no obvious tangible asset exists. Additional security can instead be provided through recourse to an overseas parent or sister company that may otherwise not be required to support the scheme.

James O’Brien, managing director of Executives Online, said: “These figures show that there are clearly still a significant number of senior executives who don’t support the theory that gender diversity in the boardroom is good for business. This comes at a time when gender diversity is a hotly debated issue and the number of females in top executive roles is still low, having dropped from 6.7 percent to 5.8 percent¹ internationally.”

The research, conducted in November 2013 among Executives Online’s Global Talent Bank², also shows that three quarters of top executives believe that more appointments of women to senior executive roles can be achieved without quotas, whereas less than a quarter (21 percent), believe that quotas should be introduced.

O’Brien continued: “Our research shows that the vast majority of executives believe quotas would not be helpful as a way to increase

the number of women in top executive roles. However, just shy of half of all respondents (43 percent) believe that quotas would help to encourage more women into senior executive roles.”

Executives Online’s research also looked at possible alternatives to quotas for achieving gender diversity in the boardroom. More than a quarter (27 percent) of respondents cite mentoring and guidance for high- potential female executives earlier in their careers as a potential option. Just over a quarter of respondents (26 percent) mention continued discussion and visibility on the issue as being a key driver to changing views and behaviours; and over a fifth (21 percent) advocate the availability of flexible working arrangements.

O’Brien added: “Examining the detailed explanations given by respondents, it’s interesting to note that the majority of those opposed to quotas express concerns that important positions may be awarded to women despite there being better qualified male candidates. They believe that candidates should always be appointed on merit alone. Others express concern that women may feel undermined due to inferences that they were awarded their position not on merit, but rather to fulfil a quota.”

The research looked at the perceived advantages and disadvantages of boardroom gender diversity. Over a third of all respondents believe that a major benefit of gender diversity in the boardroom is broader visionary thinking (35 percent), while nearly a fifth (18 percent) think that diversity delivers better governance. Other benefits cited are more innovation (17 percent) and better risk management (14 percent). However, nearly a third

(30 percent) of those polled believe there are potential downsides to gender diversity in the boardroom, including conflict (11 percent); indecision (nine percent); blockages (eight percent); and lack of direction (seven percent).

O’Brien concluded: ”The lack of progress towards achieving boardroom gender diversity has brought renewed attention to the question of whether companies are taking appropriate measures to provide equal opportunity to women and whether failure to do so is putting their firms at a disadvantage. Our research shows that a significant proportion of top UK executives dismiss the idea that boardroom gender diversity provides value, helping to explain why so few senior executive roles are held by women.”

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