In February 2011, the Lord Mervyn Davies report published a package of recommendations to improve the gender balance on boards in the UK. One of these recommendations was that executive search firms should draw up a voluntary code to address gender diversity and best practice across the relevant search criteria and processes relating to board level appointments.
The voluntary code has now been signed by the leading executive search companies in the UK, including Egon Zehnder and has gained broad support from the Chairs of FTSE 350 Companies. The code bolsters the contribution that our profession can make in finding the leadership competencies that add the most value to an organization. It contains several key provisions that will help our profession contribute to board diversity, in terms of gender and more broadly. These include, to quote a central part of the code:
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Succession Planning: Search firms should support chairmen 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 maximize 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.
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Diversity Goals: When taking a specific brief, search firms should look at overall board composition and, in the context of the board’s agreed aspirational goals on gender balance and diversity more broadly, explore with the chairman if recruiting women directors is a priority on this occasion.
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Defining Briefs: In defining briefs, search firms should work to ensure that significant weight is given to relevant skills and intrinsic personal qualities and not just proven career experience, in order to extend the pool of candidates beyond those with existing board roles or conventional corporate careers.
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Long lists: When presenting their long lists, search firms should ensure that at least 30% 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 rigor of their research.
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Supporting Selection: During the selection process, search firms should provide appropriate support, in particular to first-time candidates, to prepare them for interviews and guide them through the process.
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Emphasizing Intrinsics: As clients evaluate candidates, search firms should ensure that they continue to provide appropriate weight to intrinsics, supported by thorough referencing, rather than over-valuing certain kinds of experience.
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Induction: Search firms should provide advice to clients on best practices in induction and ‘onboarding’ processes to help new board directors settle quickly into their roles.
A global challenge
Gender and diversity topics are amongst the top issues faced by executives in the companies we serve globally. Undoubtedly, change is necessary. A growing number of top executives believe strongly that robust steps to improve diversity will strengthen their businesses in an increasingly globalized economy.
Egon Zehnder’s own diversity commitment is based on a broad view of the value of diversity, encompassing but extending beyond gender. Our strong belief is that diversity promises a competitive advantage that is founded in different backgrounds, experiences and educations.
Innovation and creativity only flourish when an organization embraces individuals with different views and experiences. This reaches far beyond merely including representatives of designated categories. The ultimate goal is to achieve a diversity of viewpoint. This is the basis of rich and thoughtful discussion; of identifying new ways of grappling with familiar problems; and of enriching an organization's leadership capabilities.
This commitment is made real by a number of practical initiatives. These include:
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Widening the talent pool. We are participating in initiatives to identify and encourage talented women who may not yet be on the radar for corporate board positions. For example, our firm is a lead sponsor of the Rising Talents program established by the Women’s Forum. We are also a member of CEO Champions, a further initiative of the Women’s Forum, which engages CEOs of major corporations to strengthen gender diversity.
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Systemic issues in corporate life. In the UK and elsewhere, Egon Zehnder is sponsoring research to investigate whether established metrics used in selection, assessment, and performance are biased against women. In the UK, we are sponsoring PhD-level research on this topic at the Centre of Gender Studies at the University of Cambridge.
There is widespread agreement on the value and importance of diversity – but as Egon Zehnder’s European Board Diversity Analysis indicates, progress to date has been slow, for a broad range of reasons. The voluntary code is an important step that will strengthen the role of executive search firms in helping companies translate their commitment to greater diversity into reality. If our profession fully lives up to the code, we will add tremendous value both to our clients and to our society.
