Sex and the state-controlled banks

Posted by Admin on Mar 7, 2010 in Stock Market | 0 comments

The Prime Minister has chosen today’s International Women’s Day to argue that there’s a strong case for obliging private-sector companies to report annually on the progress they’re making in promoting women to senior executive and non-executive position.

It is certainly striking how few women are on the boards of the FTSE 100: just one-in-ten board directors are female; which means that companies with as many as two women directors are the exception.

And, of course, female chairs and chief executives are harder to find than even women editors of newspapers or broadcasting “on-air” editors who aren’t men (that’s a big hello from me).

Now there is a case – which I put last July before it became fashionable to do so (see my note “Why men are to blame for the crunch”) – that the absence of women from the top of banks and financial companies meant that the atmosphere of board rooms during the bubble years was heavy with testosterone; and the consequence was a culture of dangerous risk-taking in the macho pursuit of short-term profits and bonuses.

You may dispute that. But even if you do, you surely can’t believe that entrepreneurial, wealth creating talents reside exclusively in the Y chromosome. So the dearth of women at the top must surely be depriving the UK of incremental income at a time when we need every penny we can squeeze to pay our way in the world.

But if companies will be forced to produce a report card on their efforts to make their senior management team look a bit more – in a gender sense – like the world rather than a dusty gentlemen’s club, it’s perfectly reasonable to examine Gordon Brown’s record.

I don’t mean in respect of the civil service or the Cabinet, although both areas of government remain a long way from gender equality.

So if for example you look at the senior positions in the Department for Innovation and Skills, which is co-sponsoring today’s “business must be less sexist” initiative, the secretary of state is a man, the permanent secretary is a man, there is one female minister out of ten, and there are just two women among the 11 most senior officials.

BIS’s annual report card on promoting women might say “must try harder”.

And, before you attempt to turn the tables back on me and the BBC, I should point out that almost all the senior management posts in the bit of the BBC where I work, BBC News, are filled by women – including the top job, Head of News, held by Helen Boaden (who – oh yes – reports to two men, the deputy director general and the director general).

However I’m more interested in how the government has exercised its clout over those bits of the private sector where it can more-or-less instruct boards to do as it says: I’m talking about the government’s gender record as 100 per cent owner of Northern Rock, 84 per cent owner of Royal Bank of Scotland and 41 per cent owner of Lloyds.

All of these organisations have seen the departure of their chairmen and many board members since the state took its big ownership stakes in them as part of rescuing them from collapse.

So are these three nationalised or semi-nationalised banks now run by a new generation of female bankers? Are there more women on their boards than at comparable businesses?

No and no.

The new chief executives at the Rock and RBS: men. The new chairs of the Rock, RBS and Lloyds: men. The vast majority of board members of all three organisations: men.

All three banks are playgrounds for ageing white men just like me and the prime minister. The Rock has one woman on a board of eight. RBS has one woman on a board of 12. Lloyds has one woman on a board of 14.

Which is why there are some who are bound to argue that Gordon Brown should get the gender mix in order in his own house, before preaching to the rest of the private sector.

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