A NEW REPORT by the Balance for Better Business (BFBB) group has found a “strikingly divergent picture” as while change is happening quickly at the boards of many listed-companies, others are slower on the uptake.
Launched in 2018 by Taoiseach Leo Varadkar, the group is looking to address the gender imbalance in the governance and senior management of Irish companies and the issues arising from it.
The report has set new targets for the executive leadership of ISEQ 20 companies which will run alongside existing benchmarks for their boards to have 33% women directors by the end of 2023. For other listed companies, that target is 25%.
The new targets call for ISEQ 20 companies to have at least 30% women on their leadership teams by 2023 and for other listed companies to have at least 25% in the same time-frame.
Where are we at now?
Some companies – like the ISEQ 20 – have already exceeded the group’s 25% interim target for the end of 2020. Before the group was launched, 20.9% of ISEQ 20 directors were women.
Meanwhile, other listed companies have shown “virtually no progress”. In these, the percentage of women on boards is still at 12% – the same as when the group was first launched. The minimum interim target for 2020 is 18%.
By September, when the information for the report was being gathered, there had also been no change in the all-male boards of companies listed on Euronext Dublin.
The report states that Datalex is one of several companies that appointed women in the meantime.
While there has been mixed progress, Ireland is still 17th out of 28 EU countries when it comes to board balance – the same position as last year.
The group also said that it prefers a voluntary approach, rather than setting quotas to be filled by female candidates – and spoke out against tokenism, or having just one woman in a leadership role to tick that box.
Despite numerous efforts and programmes to improve gender balance in businesses here “serious imbalance continues in the corporate leadership of most Irish companies,” the report said.
The average percentage of women on the boards of Irish listed companies overall is 19.1% – just slightly higher than the 17.1% average in large Irish-owned private companies.
This is its second report from BFBB, following from the first which came out in May. In both, the group outlines the business case for more diversity in senior positions in companies.
“It is clear that better gender balance in corporate leadership leads to improved business outcomes and performance, including profitability and return on equity,” the report said.
This is largely down to more effective use of the entire talent pool – which means more diversity of innovation, thinking and better governance.
The report added that “increasing the number of women on boards could be seen as window-dressing if not accompanied by change at executive level,” it said.
For private companies, the group has set a target of 30% for boards by 2023, with interim yearly milestones.
What happens next?
The report made clear throughout that “sustainable change takes time, but time alone will not ensure progress.” BFBB is encouraging companies to make a plan and take action now to achieve the next set of interim goals.
It plans to continue monitoring the progress of listed and large private companies against the targets to identify any other changes that need to be made.
Between its first report in May and the second this month, the group extended the scope of its survey and analysis to large Irish-owned private companies. In future reports, it plans to extend that again to the leadership of multinationals operating out of Ireland.
“The next phase of action will require concerted effort by investors, executive search firms and nomination committees as well as by chairs and CEOs,” David Stanton, Minister of State for Equality, Immigration and Integration, said in the report.
He stressed the need for a pipeline of potential female candidates for future leadership positions and a “large pool of female business leaders” to make female business leadership integral to Irish business.
“I would call on these boards and on the other listed companies to take action now. They do not wish to be in the headlines for the wrong reasons,” he said.