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The Female FTSE Board Report 2016
Targets may provide
interim milestones
, small steps on a longer journey, as they are rarely an end-goal.
The Davies 2015 target of 25% is such an example. Having achieved the target within the timeframe, this
has now been recalibrated at 33% for 2020. Organizations can also utilise staged targets, for example as
outlined in the Royal Bank of Scotland case study below.
––
Like any business objectives, targets should be
stretching but realistic
. Ambitious and achievable
targets should be based on an honest assessment of obstacles and opportunities for change. FTSE
350 companies were initially encouraged by the Davies Review to set themselves achievable individual
board targets, to reflect their different starting points on the journey to gender balance. More recently,
HM Treasury has encouraged all financial services firms to set their own targets for increasing the
proportions of women at mid and senior management levels.
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Targets
frame diversity as a culture change
. A perceived benefit of targets over quotas is that they
aim to move beyond descriptive change (i.e. changes in numbers) to create more substantive change
(i.e. change in culture), moving it away from a women’s issue. Changing organizational culture can
be seen as nebulous, collective and intangible, and therefore it is crucial that targets have clear lines
of accountability. Progress during the Davies Review is explained by the fact that companies and
Chairmen were under intense scrutiny to set their own board diversity goals and report progress against
them. Similarly, our research found that a key driver for developing female talent below board level
is commitment and accountability from senior leaders and managers.
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Companies leading the way
in terms of talent management hardwire diversity target achievements to managerial responsibility,
performance and reward. For instance, engagement of leaders in women’s leadership programmes is
critical to nurturing accountability and systemic culture change.
“The key thing is that every sponsor who
comes on the [women’s leadership]
programme is a potential change agent
because they’re a partner. So it’s about
educating them as to what life is like for
these women to be in the organization,
so they can then begin to think about
what they might do about it.”
– (PwC)
“Your performance rating at the end of the
year is driven partly by how well you’ve done
[on developing talent], which ultimately now
will link to your bonus as well. So it sits at
the heart of what we expect of leaders.”
– (GSK)
––
Targets are effective when
underpinned by robust metrics
that enable organizations to locate obstacles.
This also enables accountability. Several FTSE organizations include balanced scorecards on diversity
for the KPIs of their executives. Setting targets requires those responsible to investigate the fine
detail of gender balance throughout the organization, and across talent management processes. This
measurement as praxis, rather than just research, utilises the knowledge, bringing comprehensive
understanding of the issues and therefore greater capacity for change.
Targets for Gender Balance