Following the announcement that Burberry CEO Angela Ahrendts is leaving the company to take up the role at Apple, analysis undertaken by S&P Capital IQ reveals that this move means that there will now be only eleven female CEOs at FTSE 350 companies which means that just 3.14% of FTSE 350 companies have female CEOs.
But one of the eleven, Carolyn McCall OBE CCMI, Chief Executive of easyJet, has reached the top when it comes to her management and leadership skills. She was awarded the ‘Gold Medal’ – the highest honour given by CMI (the Chartered Management Institute) – in recognition of the way her leadership has helped the low-cost airline soar into the FTSE 100.
As well improving the airline’s FTSE fortunes, Carolyn, who has been at easyJet since July 2010, is credited with getting the company to the position where it now carries more passengers than any other UK airline – 60 million last year. On joining easyJet she found herself having to deal with an operational crisis as the no-frills carrier struggled with poor passenger satisfaction, low staff morale and severe criticism for tardy on-time performance, with only 51% of flights arriving on-time. Remedies were quickly implemented and the airline achieved industry leading on-time performance averaging 79% in 2011, a level it has managed to maintain since.
Also being launched today is ´Time for Change: Recruiting for Europe’s Boardroom´s by EY to help businesses increase representation of women on boards and, in so doing, achieve business growth.
With European Commission (EC) statistics showing only marginal growth in female board representation in recent years, the report – based on interviews with board members, headhunters, business leaders and advocates of corporate governance throughout Europe – exposes current barriers and highlights the need for fresh, innovative thinking in the process of making appointments. It reveals the dangers inherent in “groupthink” at the top of businesses and of the need for businesses to better understand and reflect customers’ wishes.
Five practical steps are identified in the report to improve boardroom recruitment:
Realign the composition of the board with the evolving needs of the business, looking at issues such as numbers and profile of non-executive directors, duration of service and sector-specific needs. Consider rotating non-executive directors regularly and appointing individuals with a wider range of skills. This can help open up the board’s approach to managing changes effectively and sharpen its awareness of future developments.
Investigate ways of using headhunters more effectively, such as rotating recruitment firms and separating evaluation from search. Also consider hiring headhunters who represent the candidate, rather than the client. Advertise for boardroom posts, or use the growing number of databases to identify candidates who could bring new perspectives to the board.
In order to create a larger pool of potential candidates, abandon the requirement that candidates “must have experience of a PLC board.” Instead, widen the search to include those with analytical skills, independence of thinking and a capacity to support as well as challenge.
Make a succession plan and keep it transparent.Then, in order to create a high-quality pipeline of talent, provide training for would-be non-executive directors by placing them on committees just below board level.
Consider large cross-border businesses to collaborate in the creation of a “board secretariat” to provide support for all non-executive directors, in terms of resources as well as opportunities. Such an organization could potentially provide training for those who aspire to be non-executive directors, with their employers recommending them for participation in suitable courses. This is a radical idea, and one that would undoubtedly prove challenging to implement – but it may be one whose time has come.
Julie Teigland, EY’s EMEIA Accounts Leader, says: “Organizations need to fully realize the benefits that come from engaging a more diverse range of individuals at the top. Change is moving at a sluggish pace at best throughout Europe. We hope this report goes a long way to stimulate debate further and help organizations ensure best representation and composition so they achieve competitive advantage.
“While gender is far from the only issue that needs to be considered, there is a widespread tendency to view boardroom appointments as a “closed shop”, where only candidates who have already served on boards are considered and personal networks are the primary tool used in recruitment. These factors work against efforts to broaden the base of experience and skills on company boards in order to equip them to meet the complex challenges of the modern business world.”
And commenting as the European Parliament Committees on Legal Affairs and Women’s Rights and Gender Equality voted to endorse a proposal aimed at introducing binding legislation to increase the share of women on company boards, Audrey Williams, partner and discrimination law expert at global law firm, Eversheds, says:
“While today’s (15th October) vote is a step forward for the draft Directive, before any recommended European Directive in this area can become law it has to be approved by both the EU Parliament and the Council, where it is still likely to be met with polarised views and may even be blocked by member states in the EU Council. Ministers in a number of countries have already expressed concerns over the proposed text, believing that the issue is best left to national governments to address locally. As such, I expect further controversy before any agreement is reached on this proposal.”