Sadly, it seems hard to learn from our mistakes. The subject matter was different in the financial crisis but the hallmarks of groupthink were present again. By early 2010, the realisation was growing that the boardroom, described by former fund manager Lord Myners in 2008 as ‘a retirement home for the great and the good’, needed a big shake-up. The door was ajar for different ‘types’ of people to become directors and an obvious place to start was to address the scarcity of women on boards.
In 2008, fewer than 12% of the directors at the UK’s top 100 listed companies were women. Almost a quarter of those companies had all-male boards. Royal Bank of Scotland had just one female director out of eighteen at the time of its ill-fated acquisition of ABN AMRO that precipitated the bank’s downfall. Many of these board members had very similar backgrounds, too – in fact, studying a picture of the 17 male directors at the time is like playing a game of ‘spot the difference’. It may be hard to believe, but the boards of the next 250 biggest UK listed companies, the FTSE 250, were even more male-dominated. In 2008 less than half of FTSE-250 companies had any female directors at all and the average representation was just 7%. Besides risking groupthink, 93% men is clearly not representative of society or (almost) any company’s customer base.
This was a big, emerging and brand-new opportunity, so I persevered with the idea of doing something different, despite the lukewarm feedback. I arranged a smaller lunch for 14 women out of the group of 40 who had responded positively. We were meeting on a Monday; the Friday before, I suddenly felt anxious that we might have yet another inconclusive conversation. I emailed attendees, suggesting the specific idea of the 30% Club. Over Monday’s lunch we agreed on a simple, narrow but ambitious goal: to reach 30% women on UK company boards over the following five years through voluntary, business-led change. The members of the Club needed to be the chairmen of the boards, since these were their boards and they had the authority to change things.
Of course, they were almost exclusively chairmen – at the time, just a single FTSE-100 company, Land Securities, had a female chair, Dame Alison Carnwath. Dame Alison has been a fantastic supporter of the 30% Club – but we needed more than one. So that very same afternoon, we tested out the 30% Club idea on two highly regarded and prominent FTSE-100 chairmen: Sir Roger Carr, then chairman of Centrica, and Sir Win Bischoff, then chairman of Lloyds Bank. Would they support a campaign led by chairmen aimed at reaching 30% women on boards? Both immediately said yes. In their own words, ‘when we have women on our boards, the dynamic is better, the decision-making is better – but there are too few of them’.
Sir Roger’s and Sir Win’s evangelism transformed the thinking around the issue. There were many dissenters and sceptics to start with, but the endorsement of these leading, male captains of industry made others sit up and take note. Maybe, just maybe, the under-representation of women on boards was about more than ‘just’ fairness? A new dynamic began to develop, encouraging more business leaders to join in. This different angle also proved newsworthy: when we launched later that year, with seven founding chairmen supporters, the Financial Times ran both a cover story and a prominent interview featuring Sir Roger and Sir Win. The message was clear: the scarcity of women at the top was no longer a women’s issue but everyone’s issue. Men and women were going to work together to resolve it.
But evangelism does not necessarily lead to results. Another newspaper wrote at the time that the 30% Club had a worthy ambition but ‘was very vague about how it was going to achieve it’. I soon realised that this vagueness was in fact an essential ingredient. Nothing had worked before so we needed to draw up a new map to reach our destination. We were wholly open to fresh ideas; we listened and adapted quickly as we made progress or encountered setbacks. Most of the time it was like driving in fog: we could see the immediate few feet in front, but the rest of the route was unclear. As long as we kept progressing, and learning from what was working and what wasn’t, we could reach the goal. I became a great believer in pilots to test ideas quickly rather than endless theorising. After all, we knew we had to experiment to make progress.
The approach the 30% Club took was to think big, start small but start now.
The fear of what might go wrong
In 2016, Harvard Business School Professor Iris Bohnet, the author of the acclaimed book What Works: Gender Equality by Design, wrote a case study about the rapid rise in the number of women on UK boards, something that has so far eluded the United States. Iris invited me over to help teach the case study to the first group of students. I had never even been to a Harvard MBA class, let alone taught one, and it was a fascinating experience. Professor Bohnet split the 80 students into five groups, each role-playing one of the parties involved (the government, the cross-party task force established under Labour peer Lord Mervyn Davies, the 30% Club, the executive search community and investors). The students’ first task was to list the difficulties they saw ahead. I then explained what had actually happened, whether the anticipated problems arose and how we overcame them. It was an intriguing exercise. The students came up with a cumulative total of no less than 53 potential problems. Many did arise and I started my remarks by noting that it was lucky I had not heard them before we embarked on the campaign, as it would have seemed an impossible task.
It is so easy to come up with reasons not to do something. There is always something that might go wrong. It is often very hard to envisage how to navigate through problems before they arise – but when we encounter them, I’ve found, we can often cope and find a way through. It’s very important not to panic at the lack of visibility or the unexpected twists and turns but to see that as part of the journey. That holds true in our careers as well as our personal lives, and helps us achieve so much more than if we hesitate over each step for fear of not being able to see the next or of how we will cope when we get there.
As it turned out, despite the wobbles and setbacks, the 30% Club’s timing caught the mood of the moment. The financial crisis created real appetite for change, then a few months after the 30% Club launch, Lord Davies concluded his cross-party public review into the scarcity of women on UK company boards. He made ten recommendations: like the 30% Club, he backed voluntary action rather than mandatory quotas. Lord Davies told me at the time that he had a number of reasons not to recommend legislation: one was that his daughter would ‘never speak to him again’, another was that the 30% Club chairmen supporters had promised that if given the chance, they would deliver progress through voluntary action.
Over the next five years the Davies Steering Committee and the 30% Club formed a powerful double act, combining supportive public policy with private sector action. By the time we reached our shared self-imposed deadline of end-2015, the results for the FTSE 100 fell between Lord Davies’ 25% and our 30% goals. Over 26% of FTSE-100 board positions were held by women (we finally broke past 30% in September 2018) and there were no longer any all-male FTSE-100 boards. The next biggest 250 companies had achieved even more progress from their weaker starting position: nearly 20% female directors (over 27% today) and just 15 all-male boards (now down to five).
This wasn’t an extrapolation of the past, it was a big leap forward.
It was very exciting to see this jump in the numbers – but even more exciting to see a change in the thinking. The issue was now being seen through a different lens. And success led to more success, increasing the acceptability of what we were aiming for so that eventually it just became expected.