Lack of women’s voices on FTSE boards unacceptable
Alison Steed is a multi-award winning journalist and commentator on financial issues, and she is also the owner of the personal finance website for women and families www.MyMoneyDiva.com. The opinions expressed are her own. Thomson Reuters will host an International Women’s Day follow-the-sun live blog on March 8, 2011
The fact that today sees 100 years of International Women’s Day is testament to just how influential this celebration of women’s empowerment around the world is. To think that within the last century women were being abused by the authorities for the belief in their cause – that women should be given the vote in both the UK and U.S. – when now it would seem abhorrent to not allow this. How far we have come.
But the reality is, there is still some way to go. The Lord Davies report into women in the boardroom could ultimately be the biggest fillip to women being given the same voice in the corporate world as they now have in most places in the wider world.
The idea that even though women make up more than half of the population in the UK, yet around half of FTSE 250 companies do not have a single woman on their boards, and just one sixth of FTSE 100 companies have a woman on the board, is not acceptable.
Lord Davies of Abersoch has told firms to more than double the number of women sitting on boards before 2015, otherwise they face the prospect of quotas which will force the issue.
While this would achieve an aim, I am not sure it is the best way to achieve the result – far better that the companies are promoting women on merit, rather than having to push women through to comply with a new regulation. I am not in favour of someone doing a job for the sake of it, but we all know women in corporate roles who are not only more than capable of taking on a board position, but would actually improve the performance of the company no end. So why are they not getting the chance?
However, as with so many things in the corporate world, one hand gives while the other takes away. I am talking about the ruling by the European Court of Justice that gender should not be used as a means of pricing in financial services products.
This means that insurers will no longer be able to say that young women – who are, in fact, statistically proven to have fewer accidents than young men – can have cheaper car insurance. Women will also have to pay more for their life insurance, as previously they were able to pay a lower premium because they, statistically, live longer. Figures from the Association of British Insurers (ABI) suggests that women drivers under 25 will see a 25 per cent rise in their premiums, and a rise of 20 per cent in their life insurance premiums.
Women are not the only losers though, men who are buying annuities are also affected, because they are not going to be able to get a higher payment than a woman even though, again statistically, women live longer than men. Men will see a fall of around 8 per cent in their annuity payouts, but when it comes to life insurance, their premiums will fall by around 10 per cent, according to the ABI.
So yet again, women are more profoundly affected by a ruling that is, ostensibly, to do with equality. The ruling has been widely regarded as wrong by the industry, and I have to say I tend to agree given the way that the companies will apply it. Of course, if they were to reduce the car insurance premiums of young men to match those of young women, and increase the annuity payments of women to those of men, it would seem to be a good idea. But we live in the real world, and that is not going to happen.
The changes need to be implemented by December 2012, so it will be interesting to see what horse trading happens in the meantime to prevent what would seem to be an injustice.
Photo Credit: A dealer monitors her screens on the trading floor of IG Index in London May 6, 2010. REUTERS/Kevin Coombs