Will new ways of working after the COVID-19 pandemic improve board gender diversity?
21 May 2020: Claire Fitzsimons, Senior Lecturer at Manchester Metropolitan University, considers the future of board gender diversity as new ways of working evolve following the COVID-19 pandemic.
The current challenges caused by the COVID-19 pandemic will provide a good test of whether recent progress on board gender diversity in many FTSE 350 companies is sustainable. The numerous issues now facing corporate boards could shift focus away from continued improvements to board gender diversity, unless the improvements have represented a genuine change to an organisation’s culture. Furthermore, those 63 FTSE 350 companies written to earlier this year following the 2019 Hampton Alexander review may no longer see targets for board gender diversity as a priority.
The future progress of board gender diversity is not, however, as clear-cut as one may first think. Research suggests that there is a strong business case for attracting women to senior positions. If recruiting more women to boards is seen as important to financial performance, then these companies need them to aid their recovery. However, the research in this area is inconsistent and fraught with difficulties, including challenges in determining objective reliable measures for financial or ethical corporate performance and isolating its relationship with board gender diversity. So, if ethical/social behaviour is seen as coming at a cost, women on boards may be viewed as incompatible with recovering performance.
At the same time, researchers need to consider the impact of the fundamental changes in working caused by the recent pandemic. The reality of many corporate employees working from home over the last few months has highlighted ways to balance work and family life. Many companies are suggesting that even after the pandemic, more flexible working arrangements are likely to continue.
With online working being encouraged and a move away from employees accommodated in big offices, there will be less need to be present in the office. As one of the barriers women often encounter to improved board gender diversity is the lack of flexible working to accommodate family commitments, this environmental change to working practices could be exactly what is needed to facilitate greater opportunities for women at senior management levels.
However, this new online way of working does not necessarily play to the strengths of women. Research suggesting that women improve ethical/social and financial corporate performance is based on the premise that women are more empathetic and compassionate and are better communicators. Will this be as valuable in a new digital online world with less face-to-face contact? Or, alternatively will skilful communications and women’s ability to proactively initiate conversations be even more in demand?
The jury is out; it is not yet clear whether the aftermath of the pandemic will make it easier for women to gain senior management positions. However, it is likely to make it easier for women in lower positions to maintain their role alongside a family. Equally, it may provide more opportunities for women to attain senior positions in SMEs and AIM listed companies, the latter currently having a poor record for board gender diversity.
All this in turn will improve the pipeline of female talent for senior roles in large listed companies, and remove one of the barriers to women attaining a board role in such companies. Perhaps there may not be an immediate benefit for women in senior management positions of listed companies, but there could well be a longer-term benefit.