Balancing the boards

Kate Rogers, Portfolio Director and Head of Policy at Cazenove Charities shares her thoughts on issues faced by the charity sector in Third Sector Magazine every other month. 


It is widely accepted in both the charity and corporate sector that a diverse board is more likely to be an effective board.  Both the Code of Good Governance and the Charity Commission highlight the importance of appointing trustees that represent the charity stakeholders, the community and beneficiaries.  A collection of trustees from diverse race, age, gender, disability and social backgrounds can meaningfully enrich the necessary discussions and debate.  

Gender diversity is a topic about which I feel quite strongly, not least because I am a woman working in an industry traditionally dominated by men.  As I work with charities or attend sector conferences it strikes me that the charity sector as a whole is well represented by women, and statistics published for national trustee week confirm this, with women representing 43.4% of charity trustees in England and Wales.   I am fortunate that the team within which I work is also equally balanced.  

The charity sector is ahead of the corporate sector in this regard.  The Davies Report on the gender imbalance in the top UK companies was first published in February 2011 and called on chairs of FTSE 100 companies to aim for a minimum of 25% female representation on boards by 2015.  Progress has been made, from lowly beginnings where women made up just 12% of the boards of our top 100 UK listed companies, today it stands at 24%.  

Although charity trustee boards show better gender balance, my experience suggests that it doesn't necessarily translate to the make up of all of the sub committees.  As I meet with finance and investment committees and attend finance and investment conferences, it is clear that women are in the minority.  What is it about finance that puts off women?    

Perhaps it is jargon acting as a barrier to entry for those working outside of the industry, perhaps it is an alignment with traditional gender roles that means women are less likely to engage in money matters, or perhaps (like politics) finance suffers from an image problem with over dominant male stereotypes.  Whatever the reason it is a shame.  In my opinion, finance and investment committees would benefit from more balance.  

Although I am sceptical about gender stereotyping, I feel that this article should at least reference the perceived 'typical' male and female traits that might help promote debate in finance committees.  It is well researched that the typical woman is less prone to risk-taking than the typical man, due largely to the reduced levels of testosterone. Research published by Rothstein Kass in the US last year  attempted to show how this might translate into investment management, with men likely to trade more frequently than women and to be more susceptible to overconfidence, holding on to bad investments for too long.  This led to worse performance for the male investment managers in their survey.

Despite the fact that the 'average' woman or man does not exist, the perception that the worlds of finance and investment should be the realm of the men is incorrect.  Finance committees are a crucial part of the governance structure of the charity, and diversity in all layers of governance is important. Balancing the board could be as important as balancing the books.

A version of this article appeared in the May edition of Third Sector.

The opinions contained herein are those of the author and do not necessarily represent the house view. This document is intended to be for information purposes only. The material is not intended as an offer or solicitation for the purchase or sale of any financial instrument. The material is not intended to provide, and should not be relied on for, accounting, legal or tax advice, or investment recommendations. Information herein is believed to be reliable but Cazenove Capital does not warrant its completeness or accuracy. No responsibility can be accepted for errors of fact or opinion. This does not exclude or restrict any duty or liability that Cazenove Capital has to its customers under the Financial Services and Markets Act 2000 (as amended from time to time) or any other regulatory system. Cazenove Capital is part of the Schroder Group and a trading name of Schroder & Co. Registered Office at 1 London Wall Place, London EC2Y 5AU. Authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority. For your security, communications may be taped and monitored. 

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