Women on Boards: moving past the “Peter Problem”

What’s the Peter Problem? Last year the FTSE350 had more CEOs called Peter than female CEOs. In the US, it’s apparently called the John problem.

I’ve been thinking about this in light of the Cranfield Female FTSE Board report 2021, which EY sponsored and launched today. This year,?38% of directors on FTSE 100 boards are women, but the percentage of women in Executive roles has flatlined at 13.7%. This translates into 31 women holding these roles, including 8 CEOs and 15 CFO/FDs.

What’s in a name?

Peter. John. I’ve been talking with our Diversity & Inclusion team, and I think this coincidence reflects a multitude of things that go far deeper: culture, stereotypes, people recruiting in their own mould.

We all know there are unspoken rules at work, in every organization. They define how work gets allocated, who is valued, who gets promoted and who makes it to the top.

We all know there are unspoken rules at work, in every organization. They define how work gets allocated, who is valued, who gets promoted and who makes it to the top.

At EY we work hard to create an inclusive culture where everyone feels they belong and brings their best self to work. We know this is how the best performing teams operate, that diverse teams produce the best, most innovative results.

But we also realize it’s time to turn the telescope on ourselves. Instead of scrutinizing and shaping the female pipeline to ensure they conform to our ideal – we need to examine this so called “Ideal Leader” in our heads, and what practices and biases we hold.

Along with the other evidence-based programmes and initiatives we have in place, this is how to make real progress on diversity – whether it be gender, ethnicity, neurodivergence or any other group.

The “Ideal Leader”

Every organisation has its own picture of who it considers an Ideal Leader, shaped from history and societal norms. This could be being hard-working, bright, confident – all good things. But other characteristics, things like extroverted, good at office politics, unencumbered by domestic commitments, ready to sacrifice life balance for work success – are these genuine requirements or just tradition and preference? Are they fit for the 21st century, and for our “Build back better” ambitions?

Every organisation has its own picture of who it considers an Ideal Leader, shaped from history and societal norms. But are these genuine requirements or just tradition and preference?

While it’s human nature to stick to what we know and where we are comfortable, it’s time to challenge ourselves. Otherwise, with 86.3% of FTSE100 Board executives male and 96.6% of FTSE100 Board executives white, CEOs and Nominating Committees will recruit in their mould, appoint people from their own networks, and continue the status quo.

The scale and complexity of the challenges we’re facing, from the pandemic aftershocks to climate change to technology advances, demand that we do better and get the most from our talent pool.

Ideas to take forward

1. Measure and report. This is something I’ve been banging on about since I launched the EY Women in Power and Utilities Index back in 2014: what gets measured gets done. What metrics does your organization track and report on when it comes to gender diversity? Does it make the numbers public? Using data to hold leaders to account is a proven approach: it facilitates awareness, action planning, review and feedback loops that drive change.
2. Build your pipeline. Women need to gain broad experience across the business in order to be considered for leadership roles. Ensure that those tagged as future leaders get operational responsibility and move into Profit & Loss roles.
3. ?Recruit diverse voices and listen to them. Hiring diverse candidates is an important step; so is building a culture where different opinions are heard and valued, where everyone fully participates in decision making. This may be access to networks through on-boarding and secondments and equal access to work projects through fair and transparent work allocation.
4. Think about succession planning. If 95% of current CEOs and 87% of CFOs are male, and this is where Nominating Committees continue to seek candidates for Board nominations – the status quo cannot and will not change. We need to expand our thinking. Ultimately the Chair (and the Board) appoints the CEO. Make the Nominations Committee, led by the Chair, rep responsible for the oversight of gender diversity in executive succession planning.
5. Redefine your Ideal Leader. The roles of CEO and Chair are critical. Which qualities are real requirements for your organisation, and which are historical preferences that can be replaced with a more inclusive approach?