Julie Linn Teigland is EY’s Managing Partner, Accounts for Europe, Middle East, India & Africa, having joined in 2002. Today Julie leads the Markets function for EY in EMEIA and holds senior roles on several multinational client accounts. She regularly lectures and speaks on a range of business issues and is an advocate working to increase the number of women on boards.
With the European Parliament proposing to enforce a 40% quota for female non-executive directors on the boards of large listed companies by 2020, at the end of September, EY launched a report that explores the advantages of a diverse board and reveals how boards can empower the professional advancement of women and underrepresented groups
EU legislation on female representation – a golden opportunity
The prospect of EU legislation on female representation on boards presents companies with a golden opportunity to increase the overall diversity of their boards for the better. That’s because boardroom diversity in its broadest sense – and this includes age, professional background, nationality and ethnicity, as well as gender – is an important means of accelerating performance in the boardroom.
The world is a diverse place…
The world is a diverse place, so organisations that want to thrive in an era of globalisation must embrace diversity. Regardless of whether the EU quota on female non-executive directors is ultimately enforced, companies should see it as an opportunity to assess the effectiveness of their boards and, if necessary, transform them for the better.
Time for diversity: accelerating performance in corporate boardrooms, includes interviews with board directors and chairs from across Europe, India and Africa. It finds that diverse boards are more likely to motivate a diverse workforce and executive team – as well as relate to a broad customer base. It also uncovers a strong link between diversity and good risk management, highlighting that those from different backgrounds are attuned to different kinds of risks and can challenge the executive team to manage these risks effectively.
Six steps boards can take to accelerate diversity are also identified. These are:
1. Set the right tone at the top:
The board chair must get to know all of the non-executive directors individually, facilitate open discussions and ensure that all board members’ views are heard and valued.
2. Start preparing now:
Finding the right person to fill any board position takes a lot of time and effort. Drag your feet and you could find that your competitors snap up the best candidates first.
3. Encourage your female managers to gain board experience:
Challenge the executive team to develop a ”female-talent pipeline.” This means encouraging women to gain board experience by sitting on the boards of subsidiaries and not-for-profit organisations, making presentations to the board and joining senior committees.
4. Broaden recruitment processes:
Take a more creative approach to recruiting non-executive directors by pushing the headhunter – or whoever is leading the search – to draw up shortlists that include entrepreneurs and individuals who have board experience that may not be with a listed company.
5. Monitor diversity in the organisation:
Ask the executive team to provide you with a “diversity dashboard” to track the progress of different groups. The more opportunities that your organisation gives talented people to progress, the less likely it is to suffer a skills shortage if quotas come into effect.
6. See diversity as critical to businesses:
Boards will only become more diverse if a broader range of people aspire to hold senior roles within business from an early age. Organisations can reach out to schools, colleges and other groups within their local community by encouraging board members to give talks about what they do.
You can download the full report here.