The 30% Club journey and implications for charity boards


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This presentation was the second plenary at NCVO's Trustee Conference on Monday 11 June 2013.

The presentation was by Helena Morrissey, Chief Executive, Newton Investment Management and Founder of 30% Club and explains their commitment to bringing more women onto boards and its overall effectiveness of the boardroom.

Find our more about NCVO's Trustee conference:

Find out more about NCVO's work on governance:

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The 30% Club journey and implications for charity boards

  1. 1. The 30% Club Journey and Implications for Charity Boards
  2. 2. What is the 30% Club? • The 30% Club is a group of Chairmen and organisations committed to bringing more women onto boards because it‟s good for the overall effectiveness of the boardroom • The aim is to achieve the 30% goal of women on boards by end 2015 • This is business-led, voluntary action and anti-quotas, which are discriminatory and don‟t create sustainable change – only 2% of CEOs of listed companies in Norway are women • The UK 30% Club launched in November 2010 with 7 founding Chairmen supporters. 12.5% of FTSE100 board directors were women. 21 all-male FTSE-100 boards • The Club now has 71 Chairmen supporters and 19.1% of FTSE-100 board directors are women. 6 allmale FTSE-100 boards • A confluence of factors: the Davies Report‟s ten clear recommendations; leadership shown by company chairmen; the collaborative, intensive nature of the 30% Club‟s efforts; investor focus on corporate governance; cross-party political support and sustained media attention • The representation of women on boards has opened up the issue of broader diversity – age, educational background, international experience etc. – the value of diversity of perspective 1
  3. 3. The 30% Club helps to bring the multiple efforts together and creates new initiatives where there are gaps 2
  4. 4. Women on UK Boards – a breakthrough FTSE-100: % women directors 1999-2013 20.0 19.0 17.4 15.0 15.0 11.7 12.2 12.6 2009 2010 9.4 10.0 6.9 5.0 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2011 2012 Source: Professional Boards Forum BoardWatch. Data kindly provided by BoardEx and The Female FTSE Board Report • • 13 FTSE-100 companies have already reached 30% • 23.8% women non-executive directors (up from 15.6% at end 2010) • FTSE-250 seeing strong improvements; now 51 (20.4%) all-male boards • 3 31 FTSE-100 companies now have at least 25% women on their boards Focus is on the executive pipeline to ensure sustainable, meaningful change in business culture Oct-13
  5. 5. Factors behind the UK’s recent accelerated progress • Zeitgeist. Financial crisis raised questions over status quo • Davies Report. Analysed the loss of talent and need for action beyond words. Set out clear recommendations for voluntary change • 30% Club helped to move the issue firmly from „special interest‟ to mainstream. Open source approach helped to build momentum. • UK‟s strong „Comply or Explain‟ culture and established Corporate Governance Code have reinforced preference for voluntary approach not mandated action. The Code now includes a specific boardroom gender diversity policy • Strong leadership by chairmen, who led recruitment of other chairmen • Executive search firms have (started to) adapt their board recruitment practices 4
  6. 6. Why does diversity matter? • Powerful intuitive argument for having a varied board or management team, with less danger of „groupthink‟ • 30% is the „critical mass‟ point • Investors and regulators are increasingly considering overall board effectiveness including diversity (beyond gender) as an important aspect of good governance • It is impossible to prove causality. However, 5 studies based on experiences in different countries have corroborated the intuitive argument that more diverse boards can improve corporate performance. 1. McKinsey „Women Matter‟ 2011 2. Catalyst „The Bottom Line and Women‟s Representation on Boards‟ 3. Citigroup ASX100 Women on Board Analysis August 2011 4. SocGen Getting the Right Women on Board October 2011 5. Credit Suisse Gender Diversity and Corporate Performance August 2012 • Academic research into the Norwegian experience suggests achieving balanced boards through quotas may have the opposite effect (University of Michigan The Changing of the Boards: The Impact of Mandated Female Board Representation May 2011). • The “Balancing the Pyramid” 30% Club project is exploring behavioural differences between men and women, and how these complement each other to create more effective teams – restating the business case. 5
  7. 7. The Charities Sector • „Women Count‟ 2012 report suggests Charities have better gender balance at leadership levels than private sector • Charity 100 (by funds): 27% directors, 9% chairs, 17% senior executives are women; Charity 100 (by income): 32%, 17% and 25% respectively • However, men lead the vast majority of large charities and large charities with majority of female trustees are rare • Balanced boards (charities with 40 – 60% gender balance) have formal recruitment processes • The „cross-over‟ opportunities between charities, private and public sectors are under-utilised • Setting aspirational goals (not quotas!) and having robust, transparent recruitment processes are key • Age diversity of trustees as much as an issue as gender balance • Part of effective governance and the modernisation of culture – ultimately good for attracting funds, too! 6
  8. 8. So in conclusion…. This is about organisational effectiveness and management of talent – not political correctness Charities are ahead of corporates with respect to gender balance – and can continue to lead the way There remains more to do – voluntarily – especially around age and ethnic diversity This provides a good opportunity for cross-sector solutions This issue is about creating vibrant organisations of the future The time is now! 7