The Women on Boards report published last year by Lord Davies found that in 2010 women accounted for 10.5% of FTSE 100 board directors.
It also discovered that companies with more females on their boards outperformed their rivals with a 42% higher return on sales and 53% higher return on equity.
By 2013, female representation on boards had grown to just over 17%, but today there are still fewer than one in five women in senior positions on some of the UK’s leading business boards. This under-representation
is not something that the business community can afford to ignore.
In a recovering economic climate, managing risk and improving financial performance are at the top of the agenda. Research proves that corporate boards perform better when they include the best people from a range of backgrounds. A study by Leeds University Business School found that companies with at least one female director were 20% less likely to go into liquidation.
But under-representation does not apply solely to women and this is not a challenge that can be tackled in isolation. Equally important are other areas where representation across the UK’s construction and built environment sector is well below par, such as minority communities and black and minority ethnic (BME) groups, where it’s just 3%. And that is before we even begin to examine the FTSE board.
Diversity is not simply about creating gender balance. Boardrooms are places where strategic decisions are made, risks are evaluated and governance is established, so it is logical to have competent, high-calibre individuals with mixed backgrounds at the helm.
Evidence shows that companies which attract, retain and nurture talent from a wider pool are likely to be more successful and financially robust than those that do not. Poor performance in the diversity league tables is not just disappointing from a corporate social responsibility and equality perspective; it is also bad for business.
Organisations must seek new ways to challenge the status quo and develop innovative ways of working. Globalisation has transformed the culture of consumer habits, so the companies best able to understand and engage with these different groups will thrive as a result. The fact is that homogeneous organisations will be less competitive than those that draw talent from a wider range of backgrounds and through diverse pathways.
While the business community is making a much more concerted effort to recruit deserving and capable women and minorities to their top positions, the challenge now is to maintain momentum. The Royal Institution of Chartered Surveyors (RICS) is playing its role through our Surveying The Future campaign, which is focusing on creating real change through an action plan into which the industry is invested.
Our aim is firstly to create a holistic view — from classroom to boardroom — of what factors lead to higher levels of attrition among women, BME groups and other minority community groups, and secondly to develop options for change.
Our campaign has already kicked off with a recent ‘visible women’ roundtable attended by senior female property and media professionals, and later this summer we will be holding a ‘just one thing’ debate with industry leaders on where change needs to be affected. Crucially, we will be working in conjunction with other industry initiatives, to ensure we are working together on this issue.
We are all fishing from the same talent pool, which itself is developing as society evolves. If businesses are serious about attracting talent, they must lead the diversity agenda, not merely follow it. This is why we are pleased to be working alongside Property Week’s Open Plan campaign.
Louise Brooke-Smith is president-elect for the RICS