In November 2009, the CEO of Newton Investment Management, Helena Morrissey attended a Diversity Week lunch at Goldman Sachs in London. Over the lunch it struck Helena that despite plenty of conversation only 10–15% of senior roles were being filled by women and there was little sign of a breakthrough. What to do, she wondered?
A few months later, Helena and Mary Goudie, who had met at the Goldman lunch, followed up on the issue. They set up a number of lunches with female executives to discuss what could be done. After reading extensively on the subject Helena recognised the glaring omission from many companies’ diversity endeavours: There was no measurable goal.
In November of 2010 she gave them a measurable goal by way of the 30 Percent Club. It launched with the support of seven chairmen, a website, a steering committee, a plan and a clear objective: to have 30% women on FTSE-100 boards by end 2015. There are now 112 members of the UK Club and the proportion of female FTSE-100 directors has risen from 12.5% in 2010 to 22.8% in October 2014.
Why 30%? Because that is the magical proportion when critical mass is reached: in a group setting, the voices of the minority group become heard in their own right, rather than simply representing the minority.
“Our belief is that, as more women join boards without the imposition of quotas, the more they can demonstrate the value they can add. By the time we get to 30%, the system will be self-perpetuating,” Morrissey says.
That research mirrors the real life experience of Patricia Cross, an experienced company director in Australia.
“It’s completely consistent with my personal experience as a director since 1996,” Cross tells Women’s Agenda. “I have sat on 7 listed boards and other government boards and when you have at least 3 women then gender ceases to be an issue but you get the benefit of diversity in thought around the table.”
Cross is one of the women responsible for the 30 Percent Club’s launch in Australia this week. Why? Because two years ago she was reflecting on the lack of substantive change in the composition of boards and decided to do something.
“There had been a slow movement towards increasing representation but it was plateauing,” Cross says. “It was a good change from the past but if you wanted a bigger voice for women on boards I realised we’d have to do something to make a bigger change.”
Cross was familiar with the 30 Percent club in the UK mostly because of her position on the board of UK insurer Aviva plc so she reached out to Morrissey, who is in Australia for the launch.
“In many respects, we’ve learned a lot from Australia, with its similar ‘comply or explain’ corporate governance framework (only you put it better, ‘if not, why not?’),” Morrissey tells Women’s Agenda. “Certainly your focus on transparency and disclosure leads the way. What seems to be missing, though, is real momentum and accelerating results. I’m just hoping the urgent and entirely collaborative approach of the 30% Club can be useful in achieving those.”
It is an initiative led by business for the benefit of business which is why Cross says it’s been effective in the UK. She also identifies the club’s inclusiveness as one of its key strengths.
“It’s called a club but it’s very inclusive,” Cross says. “We are a broad church with many stakeholders in the community, in government and business.”
The business community generally accepts why diversity matters but there is less consensus around “how” it can be best achieved. “If you want to be effective in addressing the how – you have to really embrace the different schools of thought,” Cross says. “I have gone out of my way to really get to know what is happening in discussions about quotas.”
It’s Cross’s view that this is an alternative worth pursuing.
“Europe attempted to achieve [better representation] in a voluntary fashion, didn’t have success and ended up with quotas,” she says. “The community really wants this, bus and the community at large and that’s another reason I want business to lead the way to achieve targets in a voluntary fashion.”
The 30 Percent club is “highly inclusive” and do-able. “It’s a very good way to start and a good base to build for the future,” Cross says. “The ask at the moment is 30% board representation which is hard to argue against. I am a logical incrementalist.”
There is no membership fee and members are not required to have 30% representation of women on their board to join.
“In actual fact we really want those companies who aren’t there,” Cross says. “We recognise diversity as a good thing but there are reasons companies haven’t reached those targets yet. The point is you need the target to focus on. You need the target so you figure out what you are doing well and what you’re not doing well. When things are measured and analysed you get a lot of traction.”
The 30 Percent Club is focused on board directors but that is not its single remit. Addressing non-executive directors is an easier ‘fix’ in some regards but Morrissey says shifting the mindset of the board is the win for sustainable long-term change within companies.
“We should not underestimate the impact of changing the boardroom on the rest of a company,” Morrissey says. “The chairman ‘gets it’ – he (occasionally she!) says ‘having more women on the board has positively changed the dynamic, it has improved decision- making’ – so he turns to the CEO and asks whether the management team succession plans recognise this…and so the CEO turns to his or her direct reports….and so it goes on! A wave of change.”
“What we have seen over a relatively short time in the UK is the focus on boards helping to shift the mindset about the importance of a good representation of women at all levels – the will is definitely there now,” Morrissey says.
Cross says in Australia the Club is looking for chairmen to be more active in encouraging other chairs to think about diversity on their boards. “A lot of that is happening anyway. It’s the zeitgeist now and we can help put some structure and support around that,” she says.
John Brogden, Leigh Clifford, Kevin McCann and Bob Every are men Cross identifies as “superstars” in this realm. Hopefully many other Australian business leaders will be inspired to join their ranks.
When it comes to diversity, if there is one thing the 30 Percent Club has learned it’s that the most impactful game-changer has been the leadership shown by top business men and women.