Gender diversity in the boardroom has a long way to go

Clare Dobie is a non-executive director of three investment trusts and an advocate for more women in senior positions

Speaking with DiversityQ, Clare Dobie discusses the importance of gender diversity and shares her enthusiasm for the investment trust industry.

Companies need to hire more women executives as well as non-executives to improve gender diversity in the boardrooms of the investment industry.

According to Clare Dobie, while many companies have the right ideas, it’s taking them a long time to implement them.

She explains: “Based on my experience, these are genuine efforts, and some companies are going to extraordinary lengths, and they’re succeeding. We now have female CEOs and female representation at senior executive levels. I am fairly confident it will continue to improve, but it’s painfully slow.”

The arguments for better diversity are the well-worn ones of fairness, better performance and opening up businesses to a broader talent pool.

“Of course, FTSE 250 companies are expected to have 30% of women on boards,” says Dobie. “So, there’s been a huge change at that level, but most of the change has been non-exec. And, in investment trusts, boards are made up of non-execs.”

Dobie began her career as a financial journalist and was City Editor at the Independent, before moving into the investment industry. She is currently a non-executive director of three investment trusts, a role she relishes as, “I love the content and the link that an investment trust provides between, in particular, a retail investor and companies in which the trusts invest. It means we are serving the needs of the investor, shareholders, and fund managers.

“It brings together all sorts of issues involving marketing to the retail and other investors, investment management, portfolio construction and managing news from the corporate world.

“It’s stimulating, with good people around the table contributing great ideas and diverse experience. Some have worked in the City, some in business; while others are accountants, lawyers and marketers. The fund managers are quite interesting types. They’re not all as strait-laced as you might think.”

Non-executive juggling act

However, juggling a portfolio of non-executive directorships can be a challenge, as she discovered. If something unexpected happens in one company, it may require more of a commitment. Soon after joining the board of Alliance Trust, the company decided to undertake a strategic review.

“We did an enormous amount of work,” Dobie reveals. “Looking at what would be in the shareholders’ interests, as well as different investment approaches. We looked at star fund managers, single fund managers, multi-asset strategies, among other options before we settled on concentrated portfolios, run by nine fund managers to provide both the concentration and the diversification. And that strategic review was more like an executive job than a non-exec. And I learnt that you’ve got to have time to commit in situations like that.

“That’s why I kept my commitments, my portfolio, to three or four companies.  I also decided to make them all investment trusts, so I only have one lot of industry reading to do.”

She says that boards are beginning to open up to those without experience in investment trusts. Dobie explains: “When you’re hiring, for example, a new Chair, you will go for someone who knows about investment trusts. But if you already have on your board several people who know about the sector and investments and investment trusts, then the next hire might be someone who brings experience from another sphere – and that might be a man or a woman.”

Although Dobie has spent most of her career in male-dominated environments, she’s not felt that her gender has been a barrier. In fact, being a woman worked in her favour when getting the job at Alliance Trust.

“They needed a woman on board, they didn’t have any,” she says. “I had the marketing skills they happened to be looking for to complement the other skills already on the board.”

City Woman Network

Being a member of the City Woman Network – she was president between 2008 and 2010 – opened her eyes to the opportunities within her grasp. Members felt inspired and encouraged to apply for non-executive and senior executive roles.

During her presidency, Dobie was a witness at the Treasury select committee on women in the City in 2010 and argued that the small pool of women at the top was a problem of demand, rather than supply. That boards were not doing enough to recruit women. 

“I pointed to the fact that there were a lot of women on management committees of FTSE 100 companies who were, therefore, qualified to be considered for the boards of FTSE 250 companies,” she recalls. “If they were on management committees of FTSE 100, they were more than suitable candidates potentially for the 250. And yet not enough of them were being picked. 

“I was astonished when other women who gave evidence to the Treasury select committee did not agree with me. They thought it was a problem of supply – which took me back a bit.

“That has now changed. At the time, less than 12% of the FTSE 100 directors were women, and now it’s nearly 32%. Things have gone a long way I’m glad to say.” 

Why the perception of not enough women?

“There were many reasons people believed there were not enough women, both cultural and business; many of which have been well-considered,” Dobie responds. “I think one of the issues for board recruitment used to be the problem of recruiting ‘someone like me’. So, if white men already dominate the board, then if you’re going to recruit more white men. I think that is changing. These things, because they’re cultural, have taken a very long time and progress is sometimes painfully slow, but we see the change reflected in the figures – up from 12% to almost 32% now.”

To keep up the momentum, sponsorship, mentoring, and networking will have a huge role to play in improving gender diversity, she argues.

However, boards need more than gender diversity. Dobie concludes: “A good board needs diverse experience, different perceptions, to ensure that every discussion, every decision looks at the question from different angles. And that doesn’t just come from gender diversity; it’s about background, experience and motivation. That’s the important ingredient.”
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