The recent birth of Prince George brings to mind one of his ancestors, also called Prince George, who was the second Duke of Cambridge. The earlier Prince George was commander in chief of the British Army for the second half of the 19th Century, during which time he insisted on promoting officers on the basis of their social status rather than their abilities. This left the army decades behind its continental rivals and was a major factor in the carnage the British suffered in WW1.
Women at executive level
A recent research report by PA Consulting Group suggests a risk of something similar happening in large quoted companies today, but with gender stereotyping – rather than snobbery – signalling the downfall of many. The report, ‘Girls Allowed’, looked for a relationship between the performance and cultural profiles of 50 international companies and their gender diversity at executive level. It concluded that: “a high performance culture is more likely to exist in organisations with higher gender diversity at the most senior level.”
Which comes first – gender diversity or high performance?
The report was not able to determine whether gender diversity leads to a high performance culture or whether a high performance culture leads to gender diversity. It may be a bit of each, or simply that companies with high performance cultures are better at achieving what they set out to do. Most companies, for whatever reason, have expressed a desire to increase their representation of women at senior levels, so perhaps it’s just to be expected that those with high performance cultures have ended up being more successful.
Diversity as a yard stick for investors
One thing is for certain – if having more women in a senior role really does show signs of a high performance culture, then gender diversity provides a useful yardstick for investors. It can show which organisations are most likely to achieve the strategic goals their management teams set themselves. Certainly the 46% of FTSE companies that have no women at board level, despite having a desire to do so, suggests that these organisations are unable to achieve relatively simple strategic goals.
PA’s report went on to note that, at the current rate of change, it will be more than 70 years before a gender balance is achieved in UK boards – meaning we may have to wait for the reign of George VII before we see it!
Stephen Brooks and Elissa Coward are people and change management experts at PA Consulting Group