Accelerating gender balance at all levels

Transcription

1 Accelerating gender balance at all levels

2 What is the 30% Club? The 30% Club is a group of Chairs and CEOs committed to better gender balance at all levels of their organizations through voluntary actions. Business leadership is key: this takes the issue beyond a specialist diversity effort and into mainstream talent management The Club launched in the UK in 2010 with an aspirational goal of 30% women on FTSE-100 boards by end There are now 94 members of the UK Club and the proportion of female FTSE-100 directors risen from 12.5% to 20.8% The 30% Club is now becoming an international, business-led approach focused on developing a pipeline of senior female talent. It is complementary to individual company efforts and existing networking groups adding to these through collaboration and the visible commitment of senior business leaders mostly men! In the US, recognising its distinct corporate governance framework, the aim from the start is better gender balance at senior management levels rather than a specific focus on boards We do not believe mandatory quotas are the right approach. Instead, the 30% Club is aiming for meaningful, sustainable change Scarce representation of women at senior levels is a global issue. The UK experience suggests that business leadership combined with a measurable goal can create a paradigm shift. A Hong Kong 30% Club was launched in March A US 30% Club launched in April Further Clubs are planned in 2014 in Ireland, Canada, Australia and South Africa. Business leadership: the catalyst for accelerating real change 1

3 Women on UK Boards a breakthrough 20.0 FTSE-100: % women directors Mar-14 Source: Professional Boards Forum BoardWatch. Data kindly provided by BoardEx and The Female FTSE Board Report 37 FTSE-100 companies now have at least 25% women on their boards 16 FTSE-100 companies have already reached 30% 25.7% women non-executive directors focus is now on executive roles FTSE-250 seeing strong improvements from a low base; now 48 (19.2%) all-male boards (down from 52.4%) Pace of female FTSE-250 appointments now overtaken the FTSE-100 An epiphany over the past 3 years in the UK: now seen as a business issue not a women s issue 2

4 US Founding Supporters Peter Grauer, Founding US Chair and Chairman of Bloomberg Dominic Barton, Global Managing Director, McKinsey & Co. Wayne Berson CEO, BDO USA & Global Chairman, BDO Warren Buffett, Chairman & CEO, Berkshire Hathaway Dominic Casserley, CEO, Willis Group Holdings William S. Demchak, Chairman, President & CEO, The PNC Financial Services Group Irene Dorner, President & CEO, HSBC USA Pat Fili-Krushel, Chairman, NBCUniversal News Group Susan Gilchrist, Group CEO, Brunswick Group Gerald Hassell, Chairman & CEO, BNY Mellon Stephen R. Howe, Jr., Americas Managing Partner, EY Larry Fink, Chairman & CEO, BlackRock Kenneth M. Jacobs, Chairman & CEO, Lazard Tom King, Co-CEO: Corporate & Investment Banking, Barclays Ellen Kullman, Chair & CEO, DuPont Bob Moritz, Chairman and Senior Partner, PWC Clarke Murphy, CEO, Russell Reynolds Associates Sheila Penrose, Chairman, JLL and Co-Chairman, Corporate Leadership Center Punit Renjen, Chairman, Deloitte Michael Roth, Chairman & CEO, Interpublic Group Conrado Tenaglia, Partner, Linklaters LLP Kent Thiry, Chairman & CEO, DaVita Healthcare Partners Inc. Sandy Thomas, Global Managing Partner, Reed Smith Tiger Tyagarajan, President & CEO, Genpact John Veihmeyer, Global Chairman of KPMG and Chairman & CEO of KPMG in the U.S. 3

5 30% Club UK Supporters Mark Austen, LV= Asset Management John Barton, Catlin Group/ EasyJet/ Next Sir Brian Bender, London Metal Exchange Charles Berry, Drax Group Sir Win Bischoff, Financial Reporting Council Mark Bomer, BDO Donald Brydon, Royal Mail/ Sage Robin Buchanan, PageGroup Sir Roger Carr, BAE Systems Dominic Casserley, CEO of Willis. Stuart Chambers, Rexam David Childs, Clifford Chance Michael Cole-Fontayn, BNY Mellon EMEA Simon Collins, KPMG Allan Cook, WS Atkins David Cruickshank, Deloitte Miranda Curtis, Waterstone s Ian Davis, Rolls Royce Martin Donnelly CMG, Department for Business, Innovation & Skills Fiona Dunsire, Mercer Sir Charles Dunstone, Carphone Warehouse/ TalkTalk Andrew Duff, Severn Trent Ian Durant, Capital & Counties Properties Neville Eisenberg, Berwin Leighton Paisner Robert Elliott, Linklaters Douglas Ferrans, IMA Stephen Lovegrove, Department of Energy Douglas Flint, HSBC Holdings plc & Climate Change Karin Forseke, Alliance Trust John McFarlane, Aviva Anita Frew, Victrex Charlie Mayfield, John Lewis Sir Peter Gershon, National Grid/Tate & Lyle Mike McTighe, WYG plc Sir Ian Gibson, Wm Morrison Sir Nicholas Macpherson, HM Treasury Richard Gnodde, Goldman Sachs Julie Meyer, Ariadne Capital Lord Green of Hurstpierpoint Frank Meysmann, Thomas Cook Group John Griffith-Jones, Financial Conduct Authority Nick Montagu, Financial Ombudsman Service Sir Philip Hampton, Royal Bank of Scotland Glen Moreno, Pearson David Harris, Hogan Lovells David Morley, Allen & Overy Rick Haythornthwaite, Centrica Paul Morris, Towers Watson John Heaps, Eversheds Chris Mullen, Pinsent Masons Peter Hickson, Chemring Mark Neale, Financial Services Andrew Higginson, Poundland Compensation Scheme Brent Hoberman, Mydeco.com John Nelson, Lloyd s of London Tony Hobson, formerly Sage Peter Norris, Virgin Christine Hodgson, CapGemini Sir Richard Olver, formerly BAE Systems Dr Franz Humer, Diageo Patrick O Sullivan, Old Mutual Lady Judge, Pension Protection Fund Alan Parker, Brunswick Sir Bob Kerslake, Civil Service, Cabinet Office Sir John Parker, Anglo American Will Lawes, Freshfields Bruckhaus Deringer Stephen Parish, Norton Rose Fulbright Rich Laxer, GE Capital International Sir John Peace, Burberry/ Standard Sir David Lees, Bank of England Chartered Paul Leinster, Environment Agency Lord Leitch, Bupa Ian Powell, PwC Sir Michael Rake, BT Group Paul Rawlinson, Baker & Mackenzie Sir Simon Robertson, formerly Rolls Royce Baron David de Rothschild, Rothschild William Rucker, Lazard Sir Nigel Rudd, BAA/Invensys Philip Rutnam, Department for Transport Chris Saul, Slaughter and May Jonathan Scott, Herbert Smith Freehills Peter Scott, Engine Group John Stewart, Legal & General Carl-Henric Svanberg, BP Robert Swannell, Marks & Spencer Alexander Y. Thomas, Reed Smith Martin Thomas, Lancashire Holdings Ben Tidswell, Ashurst Michael Treschow, Unilever David Tyler, Hammerson/ Sainsbury s Steve Varley, EY Sir David Walker, Barclays Bob Wigley, Hibu 4

6 30% Club Hong Kong Supporters Howard Bilton, The Sovereign Group Laura Cha, Financial Services Development Council Victor Cha, HKR International Limited Ronnie C. Chan, Hang Lung Group & Hang Lung Properties Limited Timothy Chen, Telstra International Henry Cheng, New World Development Company Ltd Raymond Chi en, Hang Seng Bank Limited and MTR Corporation Ltd Susanna Chiu, Hong Kong Institute of Certified Public Accountants Yei Ching Chow, Chevalier Group Ada Chung, Companies Registry, Hong Kong SAR Justin D Agostino, Herbert Smith Freehills Mervyn Davies, Pinebridge Investment Limited Douglas Flint, HSBC Holdings plc Tim Freshwater, Grosvenor Asia Pacific Jonathan Gove, Marsh & McLennan Companies Hong Kong Stuart Gulliver, HSBC Holdings plc Mark Hellmann, Hellmann Worldwide Logistics Ltd Ken Hitchner, Goldman Sachs Asia Pacific Ex-Japan Denise Jong, Reed Smith Teresa Ko, Freshfields Bruckhaus Deringer Beau Kuok, Kerry Properties Ltd Simon Kwok, Sa Sa International Holdings Ltd Stephen Lackey, BNY Mellon Stella Lau, the Women s Commission Irene Lee, Hysan Development Company Ltd Martin Lee, Henderson Land Development Company Ltd Warren Lee, SHK Hong Kong Industries Ltd Richard Li, PCCW Ltd Victor Li, Cheung Kong (Holdings) Ltd KS Lo, Great Eagle Holdings Ltd Elaine Lo, Mayer Brown JSM John McFarlane, Aviva plc Anthony Neoh, China Securities Regulatory Commission Simon Page, Egon Zehnder Tim Payne, Brunswick Group Gilles Planté, ANZ Hong Kong Keith Pogson, EY Asia Pacific Christopher Pratt, Swire Pacific Ltd John Rice, GE Martin Rogers, Davis Polk Edward Rubin, Corton Hill Investments Ltd Stuart Salt, Linklaters Patrick Sherrington, Hogan Lovells Edith Shih, The Hong Kong Institute of Chartered Secretaries Kristi Swartz, Bryan Cave LLP Kevin Taylor, British Telecommunications Carlson Tong, Securities and Futures Commission Jean-Pascal Tricoire, Schneider Electric Katherine Tsang, Standard Chartered Bank (Hong Kong) Limited Andrew Weir, KPMG Kelvin Wong, The Hong Kong Institute of Directors Maureen Wong, Hong Kong, BP Asia Limited Anna Wu, Chair, Mandatory Provident Fund Schemes Authority 5

7 The Role of Chair/CEO Supporters The asks are a belief in the value of better gender balance at senior levels and the view that businesses and senior business leaders should drive the change (not a quota) There is no requirement to have 30% women on the board or management committees - the underrepresentation of women at senior levels is a global phenomenon, so better gender balance is inevitably an aspiration rather than reality Supporters are invited to all events, and many speak at these and at other occasions, but this is entirely voluntary. We always make it clear that views expressed do not necessarily represent the specific views of each and every supporter. In the UK, a small group of senior Chairs act in an advisory capacity to the steering committee. The plan is to replicate this in the US There is no membership charge. The 30% Club works through individuals volunteering their time and companies and other organizations hosting events (we do not charge attendance fees). Events have been hosted by, amongst others, the London Stock Exchange, Bloomberg, Rothschilds, Linklaters, BNY Mellon, GE Capital, KPMG, No. 10 Downing Street, the Financial Times, Goldman Sachs, EY, Cass Business School A steering committee and sub-groups work on separate components of the intensive and concerted program 6

8 Bringing cohesion to existing efforts and creating new initiatives from schoolroom to boardroom This is an open source and collaborative approach to creating change A business initiative, NOT a diversity business Targeted efforts to develop female talent 30% Club Investor Group (18 members, 2trn AUM) coordinates shareholder approach to constructive company engagement 2014 goals: intensify pipeline efforts; launch in US, Canada, Ireland, S. Africa, Australia; schools and university program, public sector initiative and training for young female professionals 7

9 The business case There is clearly a powerful intuitive argument for having a varied board and executive team, with complementary skills and less danger of groupthink 30% is the proportion when the contributions of a member of a minority group are valued in their own right critical mass Institutional investors are increasingly considering overall board effectiveness including diversity as an important aspect of good governance The 30% Club is focused primarily on the greater effectiveness of organizational diversity. However, 5 studies based on experiences in different countries corroborate the intuitive argument that more diverse boards contribute to improved corporate performance. Please see for these articles 1. McKinsey Women Matter Catalyst The Bottom Line and Women s Representation on Boards 3. Citigroup ASX100 Women on Board Analysis August SocGen Getting the Right Women on Board October Credit Suisse Gender Diversity and Corporate Performance August 2012 We are also analysing the impact of broader diversity at senior levels on improving risk management Academic research into the Norwegian experience also suggests achieving balanced boards through quotas can have a detrimental effect (University of Michigan The Changing of the Boards: The Impact of Mandated Female Board Representation May 2011) 8

10 Developing the pipeline: key to sustainable change There are a broad range of factors behind the under-representation of women at senior levels: sociological, cultural and traditional working practices Creating a better gender balance at all senior levels requires a sustained, concerted series of talent management efforts, ultimately modernising working practices for everyone. Countries with boardroom quotas have failed to develop the pipeline (in Norway, only 2% of listed company CEOs are women) The 30% Club initially focused on the professional services firms these suffer acute attrition rates between high female intake and low proportion of female partners. McKinsey led a project involving 700 people from 17 firms (now 25 organizations), reporting on initial findings December 2012 an action plan is ongoing Balancing the Pyramid Project involves a broader group of companies: BA, Baker & McKenzie, Barclays, BNY Mellon, BP, British Gas, Cairn Energy, Centrica, Diageo, Freshfields, GE Capital, IMI plc, J P Morgan, Jupiter Asset Management, KPMG, Lloyds Banking, LVMH, Marks & Spencer, Newton, Nomura, Pearson, Professional Boards Forum, Rothschild, Tesco, The Miles Partnership, UBS and Vodafone Cracking the Code, new research led by behavioral psychologists YSC for the 30% Club explodes ten myths about what holds women back and offers practical steps for companies so efforts can become more on-target A 30% Club cross-company mentoring scheme, aimed at mid-career women, was launched at EY in September Eight companies are involved in the initial pilot. The feedback has been very positive (see website) and 20 firms are expected to participate in the first cohort in September % Club Scholarships are now being offered by Henley, London and Saïd Business Schools in each case, a fully-funded MBA or Executive Education place is awarded based on an essay submission or company recommendation A Young Professionals group and a program of careers advice for girls at school and university are being developed this year 9

11 The investor group engaging constructively Our approach is one of constructive engagement with listed companies as part of broader analysis of a company s governance and development of future top talent. Individual countries obviously have differing governance codes and local practices we are working within each of these through a soft power approach (not hard-line activism) 30% Club Investor group coordinates institutional investors and asset owners. We have agreed best practice guidelines for constructive engagement with companies around the issue There are 19 institutional members of the UK Investor group representing over 2trn AUM: Aberdeen Asset Management, Aviva Investors, AXA Investment Managers, BlackRock, Cheviot Quilter, Ecclesiastical, F&C Investments, Hermes Equity Ownership Services, HSBC Bank Pension Trust UK, J P Morgan Asset Management, Jupiter Asset Management, Legal & General Investment Management, the Local Authority Pension Fund Forum, London Pensions Fund Authority, Newton Investment Management, PIMCO, Royal London Asset Management (CIS), RPMI Railpen and Standard Life Investments BlackRock s US responsible investment team has now joined this initiative and the intention is to develop a global investor group We have been encouraging improved disclosure beneath the board and exco levels and are working on creating an aggregate baseline, so progress can be measured Where insufficient action is taken, individual members of the investor group are prepared to use their voting rights to encourage greater response 10

12 Factors behind the UK s accelerated progress Zeitgeist. Financial crisis raised questions over status quo. Gender diversity perceived as a starting place for diversity of thought at senior management levels Davies Report. Set out ten clear recommendations in a useful and replicable blueprint for change. Pressure for a legislative quota from the EU has helped highlight voluntary action as the better way 30% Club has helped to coordinate many existing efforts, develop new ones, create momentum and - through the public commitment of chairs/ceos move the issue firmly into the mainstream UK s Corporate Governance Code now includes a specific boardroom gender diversity policy. Recommended term limit for directors creates natural turnover on boards. A distinct feature of the UK Executive search firms have developed a Voluntary Code and continue to adapt their board recruitment practices, broadening the criteria for prospective candidates The investor approach, executive search firms code and pipeline initiatives can all be globalized and combined with local efforts to suit individual markets The most impactful game-changer has been the leadership shown by top business men and women 11

13 Establishing the right goals for the US What gets measured gets managed a numeric goal (or goals) provides real impetus for change Lack of fixed term limits for non-executive directors means a sole focus on boards would be misplaced. For the record, the 2013 Catalyst Census of Fortune 500 Companies found that women held 16.9% of board seats a marginal increase from the previous year s 16.6%. Progress has stagnated over the past decade From the beginning, therefore, it is proposed that the US 30% Club is aimed at improving gender balance at all levels including, but not limited to, boards We will establish a baseline as at end 2014, and measure progress over the following five years in female representation on Executive Committees as well as one and two levels below this (appropriately adapted for professional services firms) Our goal is 30% women at all these levels by 2020 Importantly, this is an aspiration, not a requirement carrot not stick! 12

14 ExCo in the US - where are we now? 20-first Gender Balance Scorecard shows that 60% of the top 100 publicly-listed US companies have at least two women on their Executive Committees Of the top 100 companies in the US, eight companies, including IBM, Pepsico, Lockheed Martin and General Motors, have a woman Chief Executive Of the 1,164 Executive Committee members of America s Top 100 companies, only 199 (17%) are women Two-thirds of these 199 women are in staff or support positions, such as HR, Communications or Legal. Only 70 (35%) are in line or operational roles There has been no significant change in these percentages over the last three years A 30% ExCo goal requires a significant acceleration in results Source: Survey Methodology: The data is based on publicly available information provided by the top Fortune 100 companies in the US on their websites as of March The list of companies was drawn from the Fortune 500 Global rankings published in July The Executive Committee is defined as the group of executives who report directly to the CEO.C CEO. Chief Executive. 13

15 30% Club Activity highlights to date July 2011 Inaugural event, Cass Business School where Martin Gilbert, CEO Aberdeen Asset Management, highlighted key role institutional investors can play to catalyse a faster pace of change October Downing Street event where the Prime Minister endorsed the aims and work of the 30% Club February 2012 Northern Future Forum in Stockholm, giving UK views on How do we get more women into top positions? July 2012 Reception hosted by Rothschild to celebrate achieving 50 Chair supporters July 2012 House of Lords evidence session and intensive campaign leading up to November 2012 when the EU amended mandatory quota plans November 2012 Transforming Business Culture landmark event, London Stock Exchange December 2012 Shifting the Needle: Getting more Women to the Top of Professional Services Firms McKinsey-facilitated 30% Club project with 10 law and 7 accountancy firms March 2013 Hong Kong launch with 41 founding Chair supporters and speaker Hong Kong Chief Executive CY Leung April 2013 Accelerator steps to Female Talent Development seminar hosted by Bloomberg September 2013 Launch of cross-company, cross-sector mentoring scheme pilot involving 8 companies, targeted at mid-career women hosted by EY December 2013 Cracking the Code, launch of research into behavioral differences between men and women at work, led by YSC and KPMG. Guest speaker Lionel Barber, Editor of the Financial Times. Final report published March 2014 February 2014 Honoured with Ruby Award for creating change at the Center for Talent Innovation summit in New York March 2014 Hong Kong events including BBC World Service debate The hand that rocks the cradle cannot rock the boardroom. April 2014 US launch hosted by Bloomberg for founding supporters 14

16 2014 May - December Global Programme 14 th May 30% Club Ireland launch with founding Chair supporters, Dublin 20 th May Norwegian IoD: The 30% Club: the Soft Power Route to the Boardroom, Oslo 21 st May Cross-Company Mentoring Programme Pilot close-out event hosted by Freshfields, London 29 th May Launch event for public sector organisations hosted by John Griffith-Jones, Chair Financial Conduct Authority, London June June June Launch of new Executive Education Scholarship in association with the London Business School, London Launch of 2 nd cohort MBA Executive Programme Scholarship at Henley Business School, London 30% Club private lunch with nomination committee chairmen, Hong Kong 17 th June 30% Club Canada Launch, Toronto 18 th June 30% Club US seminar and reception at Bloomberg, New York 19 th June 30% Club Southern Africa launch event, Johannesburg 1 st July Global 30% Club annual Conference and Chair/CEO reception hosted by Goldman Sachs, London September September Professional Services Firms Update event, London 30% Club Ireland launch event, Dublin 15

17 2014 May - December Global Programme (cont d) September Launch of first cohort of Cross-Company Mentoring Programme, London 1 st Sept Anniversary of the HK Code Provision and launch of the 30% Club research on Nomination Committee best practices, Hong Kong 11 th Sept Announcement of Henley Scholarship award winner hosted by EY, London 12 th Sept 30% Club HK Boardroom Lunch, Hong Kong 24 th Sept FTSE-250 breakfast at KPMG, London Oct Launch of the 30% Club Women to Watch 2014, Hong Kong 10 th Oct IMF 30% Club breakfast event at Four Seasons Hotel, Washington DC 16 th Oct Executive Search seminar, London 4 th Nov 2 nd Breaking the Mould Awards at the Institute of Directors, London 12 th Nov FTSE-250 breakfast at KPMG, London 2 nd Dec Early careers event targeted at schools, universities and young professionals, London 16

18 Next steps for 30% Club US May follow-up discussions with supportive firms June 18 th 4-6pm Seminar hosted by Bloomberg in New York to discuss US implementation, followed by drinks reception (firms to nominate attendees) July September Steering Committee established, baseline data project commences, existing initiatives broadened to encompass the US (where this is agreed to be appropriate) and new areas explored October 10 th Four Seasons, Washington DC Breakfast meeting to coincide with start of IMF, guest speaker Mark Carney November to December plan for

19 Contact points for further information Website: General enquiries: Media enquiries: Administration and website: Twitter, LinkedIn, Blogs: Project Management: Balancing the Pyramid: Professional Services Firms: US: Ireland: Canada, Australia: Southern Africa: Hong Kong: