Will board rooms ‘come home’?

By Simon Holman

The origin of this article came on the last Sunday evening of July while watching The Lionesses – a.k.a. the England Women’s Football team – playing in, and winning, the Women’s European Championship held on home turf.

For those of you familiar with the 1996 song ‘Football’s Coming Home’, it was the pre-cursor to the England men’s football team falling short when hosting the European Championship held that summer. The refrain after this summer’s tournament was that it was the women that had finally brought football home. Very true, very laudable – and what a fantastic series of performances – yet it masked the fact that the success of that group of women is almost despite the hurdles the women’s game has faced.

One of the successes of this summer’s tournament was the location of the matches in the earlier rounds, taken all around England and to communities which rarely get the chance to see elite international football on their doorstep. Smaller stadia than are usually used for the equivalent men’s tournaments, yet stadia that welcomed rapturous and enthusiastic crowds.

It subsequently transpired that the owners of some of the larger stadia were approached about hosting games but showed little interest. Little interest, that is, until it became apparent that there was more interest from fans in attending the matches than they’d anticipated but by which point it was too late. The unspoken sentiment was clear: it wasn’t worth their while to host a women’s football match, international calibre or not.

Equality isn’t a reward, it’s a right. 

Let’s not beat around the bush: there are plenty of people who believe the women’s game of football is inferior to the men’s equivalent. Their reasons are of no concern or importance. What is of utmost importance though is that women’s football in England was effectively banned for fifty-two years between 1921 and 1972. The women’s game was very popular in 1921, yet the Football Association (FA) decreed “that the game of football is quite unsuitable for females and should not be encouraged.”

Unequal treatment for women’s sport wasn’t confined to the twentieth century though, but still swirls around the modern day in various forms. Whether it be the 62 Irish women rugby players who felt compelled to write to the Irish government such was their collective lack of faith in the organisation and structures meant to support them, or the need for someone such as Andy Murray in tennis regularly to correct journalists asking questions about achievements made in the sport which assume that only the men’s game exists, the latent discrimination is never far from the surface. In fairness to tennis, the four Grand Slam tournaments do now award equal prize money for both the men’s and women’s draws, which is progress of a fashion and something that many industries, including our own, still aspire to.

The subject of pay brings me back to where we began, with football. One doesn’t need to be an avid fan of the sport to know that the sums of money in the men’s game are vast, particularly at the elite level where earning hundreds of thousands of pounds a week is quite commonplace. What do those salaries achieve? In many cases, very little. One team will win the league, perhaps another the FA Cup, four each year make it into the Champions League and the extra financial rewards it brings (and of course only one winner). Three will be relegated from the Premier League, and it’s a fair assumption that the managers of some of those clubs will be sacked during the season. Other managers will also be sacked, and their replacements will help avoid the failure of relegation. This happens in the leagues below too. Put simply, there’s an awful lot of money spent on failure each year.

All very interesting, you might think, but what’s the relevance? It struck me that football, like stock markets, is an industry where outsized rewards in exchange for average outcomes or failure are commonplace and where gender equality is still a long way from reality. We know that there are very few (if any?) investment managers in the UK who vote against executive remuneration proposals as often as we do. The important point here is that our stance and our policy isn’t some simple dogmatic stance on high levels of pay being unacceptable; rather, it’s that we seek to support fair pay throughout a company and believe it’s only fair to demand that larger remuneration packages are earned with reference to stretching targets based on the delivery of a long-term strategy.

Is excessive remuneration for poor achievement any different whether achieved on the pitch or in the boardroom?

We also know that gender representation in the boardroom remains a work in progress. The 30% Club, of which we’re an active member, has achieved laudable success since its inception and has been able to expand its scope of late to incorporate broader measures of diversity, even though further scope for progress on gender remains to be achieved.

The Hampton-Alexander Review was instigated by the Government in 2016 to focus on (the lack of) female representation in the board rooms of FTSE 350 companies. The majority of companies have achieved the target of 33% women on boards, although it remains a minority where companies have met the 33% women in leadership target (the latter combining executive committee and direct reports to executive committees). It’s progress but by no means a completed goal.

Why does this matter? It’s now generally accepted that having a diverse mix of voices around a table gives a better chance of succeeding at the task in hand, which for a company attempting to execute a long-term business strategy is rather important, to put it mildly.

The systematic freshening up of corporate board rooms is something that ought to lead to better outcomes for investors if it means better strategic decisions are taken. The tendency for people of similar backgrounds to fall into groupthink is a stumbling block that can be avoided if a better mix of people is implemented, and better gender diversity is one obvious way of achieving that.

It’s now generally accepted that having a diverse mix of voices around a table gives a better chance of succeeding at the task in hand

To sum up then: the history of UK listed companies is one of male-dominated board rooms where executive members have reaped handsome financial rewards regardless of the success or failure of their strategy. The history of UK football is one of a male-dominated sport where owners and players have reaped handsome financial rewards regardless of the success or failure of their club. Not all sports are as lucrative as football, but the financial aspect is only one part of the equation. Sport can be a reflection on society and the evidence suggests that women are still fighting for fair representation and treatment, just as they’ve been fighting for better representation around the board room table.

Equality isn’t a reward, it’s a right. That’s why striving to ensure fairness and equal treatment for women in all professions remains vital to pursue.

Postscript: We’re also conscious of our own credentials on gender diversity, both for Castlefield as a whole and for the investment management arm we represent. On the latter, over the past ten years our growth has seen our gender split improve. That’s yet to feed upwards to gender parity at Board level, something we acknowledge and recognise must change, which it will. Of course, gender isn’t the only marker of diversity, and we’re about to undertake a project to look at diversity, equality and inclusion in product design. Ethnic and racial inequality – and yes, discrimination in certain quarters – is again prevalent in both sport and board rooms and could merit a piece such as this by itself. Diversity, equality and inclusion is a theme we expect to return to regularly.