Hertz calls for Smashing the Glass Ceiling

The New Statesman: ‘Come on, get your sledgehammers out’

By Noreena Hertz
Published: 7th August 2006

The term “glass ceiling” was coined in 1984. More than 20 years later, the ceiling has barely cracked. There isn’t a single country in the world that has as many female as male politicians. In business, the situation is even worse. Its highest echelon – the board – remains a chauvinist’s dream. For every hundred men who are non- executive directors of UK companies, there are only 11 women. Portugal does not have a single female board member in any of its leading companies.

When it comes to getting more women into parliament, politicians have at least started to take active measures. The British Labour Party introduced all-female shortlists in 1997. Half of David Cameron’s A-list candidates are women (although Tory selection committees seem wedded to choosing from the other half). The Scandinavian countries, in particular, have had systems of quo tas for women for some time. But that’s for getting more women into parliament. When it comes to getting more into the boardroom, most politicians have done nothing. Apart from Norway, that is – which announced in 2002 that it would be required that 40 per cent of its board members be female – and Spain, which announced a similar mandate this June.

Critics of positive discrimination oppose such direct intervention on the grounds that it sends a message to women that they are not capable enough to be considered on their own merit. But we’re not talking about putting incapable women in the place of capable men. We’re talking about making sure that equally capable women have a fair chance of getting a seat in the boardroom.

There are critics of corporate power who don’t like such a tack, either. “Women should be glad that they are not part of the machinations of the boardroom, not made to feel that this is something they should aspire to,” I can envisage some of these critics saying. Yet keeping women out of the privy chamber serves only to maintain its locker-room nature, a clubbiness that we now know played an important part in such cases as Enron and WorldCom, and is antithetical to good corporate governance. Forcing companies to recruit away from the golf course might lead to the appointment of more women from NGOs and academia and medicine, all of whom are likely to understand such concepts as stewardship and sustainability much better than men picked from the usual hunting grounds.

Others who don’t approve of legislating for more women in power are the corporate apologists who carry the anti-regulation banner. “Yet another attempt by the government to burden big business, bound to create additional costs with no benefits to speak of” is their line – a line that the facts do not support. Several academic studies have demonstrated that companies with women as directors achieve higher returns on equity, stronger financial performance and higher shareholder value than companies with all-male boards. And I hate to state the obvious here, but one is hardly going to optimise talent by, in effect, dismissing 51 per cent of the population from one’s applicant pool.

Read the rest of the article on the New Statesman website