International Women's Day 2023
When Lord Davies published the original review and recommendations to increase board diversity in 2011, only 9.5% of members on the boards of FTSE 350 companies were women. A report by the Equality and Human Rights Commission (2008) suggested that given the rate of change it would take more than 70 years to achieve gender-balanced boardrooms in the UK’s largest companies.
The 2023 FTSE Women Leaders Report, published 28th February, announced FTSE 350 reaching 40% female representation on boards three years ahead of target. Whist there is still much work to be done, notably with CEO/CFO roles and some sector disparity exists in senior leadership and direct reports, this is a milestone to be recognised and celebrated.
The Report reinforces the role the Executive Search community plays, described as ‘the holder of best practice and the architect able to design effective mechanisms to help fuel further progress. Equally important is their role in supporting the public listed boards that have made progress in recent years, to avoid slipping back’.
As recognition grows, particularly amongst investors, that diversity and inclusive leadership are business imperatives that result in better decision-making and play an essential role in a company’s long-term success, so best practice is evolving, with increased understanding of intersectionality and the importance of inclusive recruitment strategies which support diversity in its broadest sense. 2023 International Women’s Day ‘Equity not Equality’ campaign advocates for equity-based solutions which recognise ‘each person has different circumstances, and allocate the exact resources and opportunities needed to reach an equal outcome’.
Equity-based solutions are at the heart of Miles Advisory’s Search approach, which underpins our strong track record of successful diverse appointments. We are signatories to The Standard Voluntary Code of Conduct for Executive Search firms, set out below, which forms the foundations of our approach.
We always go beyond the basics of the code, however. We take the time to understand the needs of our clients and create solutions to best to support their goals, driven by the belief that the leaders we place are uniquely positioned to make a difference, creating tangible value for all stakeholders.
We believe in the power of networking, the positive impact of which was highlighted in the FTSE Women Leaders Report and work hard to maintain formal and informal networks supporting diverse communities.
We are committed to an open and inclusive approach. We value the importance of relationships, often mentoring and counselling and giving our time both within and outside of our assignment. We work to really know the people we work with and so know what is needed to reach the equal outcomes we strive for.
Our goal is to support clients to find and acquire leaders for the changing world. And to go beyond search in supporting these leaders to build the connectivity between purpose and people that results in engaged employees and diverse, sustainable businesses.
The Standard Voluntary Code of Conduct for Executive Search firms:
Board succession planning
Search firms should support Chairs and their nomination committees in developing medium-term succession plans that identify the balance of experience and skills that they will need to recruit for over the next two to three years to maximise board effectiveness. This time frame will allow a broader view to be established by looking at the whole board, not individual hires; this should facilitate increased flexibility in candidate specifications.
Executive succession planning
Search firms should support nomination committees, CEOs and CHROs in developing clear, appropriate targets for enhancing diversity in senior executive roles and in developing plans to strengthen the pipeline of diverse candidates.
When taking a specific brief, Search firms should look at overall board or senior executive composition and, in the context of the business’s agreed aspirational goals on gender balance and diversity more broadly.
In defining briefs, Search firms should work to ensure that significant weight is given to relevant skills, underlying competencies and personal capabilities and not just proven career experience, in order to extend the pool of candidates beyond those with existing board roles or conventional corporate careers. On Chair searches in particular, Search firms should work to ensure that the briefs are framed in as open and inclusive a way as possible.
Longlists / shortlists
When presenting their longlists, search firms should try to ensure that at least 40% of the candidates are women – and, if not, should explicitly justify to the client why they are convinced that there are no other qualified female options, through demonstrating the scope and rigour of their research.
Search firms should seek to ensure that the shortlist is appropriately reflective of the longlist. They should discuss with their clients each woman on the longlist and seek to have at least two women whom they would ‘strongly recommend’ that the client should meet for Non-Executive searches; they should have a similar aspiration on Chair searches as well. Search firms should also discuss and agree with the client and meet specific targets for ethnic diversity and other protected characteristics on the longlist and seek to ensure that the shortlist is appropriately reflective of the longlist.
During the selection process, search firms should provide appropriate support to candidates, in particular first-time applicants, to prepare them for interviews and guide them through the process.
Supporting candidate selection
As clients evaluate candidates, Search firms should ensure that they continue to provide appropriate weight to intrinsic competencies and capabilities, supported by thorough referencing, rather than overvaluing certain kinds of experience. Search firms should, as necessary, advise their clients on how to run their interview process to demonstrate the required rigour and professionalism and share best practices on how to reduce the impact of unconscious biases.
Search firms should provide advice to clients on best practice in induction and ‘on boarding’ processes to help new board directors or senior executive hires settle quickly into their roles.
Embedding best practice
Search firms should ensure that best practice in supporting clients on enhancing board and senior executive diversity is well documented and shared internally and that adherence to the Code is effectively monitored. They should discuss (or arrange training on) unconscious biases and how to reduce their impact.
Search firms should signal their commitment to supporting diversity on boards and in senior executive ranks, and their adherence to the Code, through their websites, marketing literature and client discussions. They should share data on their track record on their website as appropriate and include case studies of their success.
Broadening the candidate pool
Search firms should seek to broaden their own networks of potential candidates, leveraging as appropriate external lists produced by relevant organisations. They are encouraged to invest time into developing relationships with the pipeline of future female and ethnically diverse candidates.