Blog : BOARD TALK
|Posted on December 12, 2016 at 7:25 PM|
Will it be a Happy 2017 for UK boardrooms?
Today we have a deeply pessimistic take on UK economic prospects, as 72% of FTSE 350 companies in a survey expect economic conditions to deteriorate in the next 12 months. The bi-annual FT-ICSA Boardroom Bellwether survey finds confidence at its lowest since the surveys began in 2012.
A slightly puzzling statistic: 59% rate Brexit as 'potentially damaging to their business' yet less than half (43%) see it as "principal risk." Only 1% of respondents are considering moving their head office from the UK to somewhere in the European union, says the report.
The survey is all about doom and gloom. And with that sort of anticipation, it is unsurprising that there is little appetite for change.
So ...don't hold your breath on boardroom diversity, for a start. The number of boards reporting progress on gender diversity is down: 63% report that their boards are diverse in terms of gender, as opposed to 67% in May 2016 and 69% in December 2014, at the heart of the UK government's carrot-and-stick, name-them-and shame-them campaign to boost the number of women on boards.
Call it 'commitment', call it 'hype', or call it 'momentum' - haranguing business on diversity can work, but only short-term unless there IS real long-term commitment, and that requires an overall vision, rather than a day-to-day survival strategy based on guesswork on what 'Brexit is Brexit' means.
Gender diversity was also always the easiest option, when it comes to diversity.
The UK government is at last now making a noise around ethnic representation on boards via the #ParkerReview. But the number of compaies rating their boards as ethnically diverse has dropped to 22% - from 25% in Decmber 2015 and - bizarrely - 34% in May 2016.
I don't really understand this - did the boards go back between May 2016 and now and LOOK at the people involved, instead of going by some tick boxes on applications made through headhunters?
At any rate, 28% of FTSE 350 respondents have achieved less than 20% representation on boards, with 40% of FTSE 250 companies admiting to being below 20%, says the report.
Yes, it mentions the Hampton/Alexander Review and the "challenge" to set better gender balance targets in the senior executive teams. But while the challenges keep being set, there is a danger of slipping further on changing ground.
Just 52% of respondents "indicate that leaving the EU would cause 'some' or 'significant' damage and 32% predict no change" says the survey.
The far greater challenge, it seems to me, exists around the need for honesty - all around the debate on what is possible in UK boardrooms, when it comes to change post Brexit.
That isn't likely in the immediate future, given what is likely to be preoccupying them: only 8% of respondents anticipate an improvement in the UK economy in the next 12 months, down from 40% in December 2015.
As for 'workers on boards' - 85% of respondents are against it. We don't even need a debate, it seems.
Risk remains a buzzword in the boardroom: cyber risk is the primary concern, with 80% of respondents raising the risk as increasing, followd by social media risk (52%) and reputational risk (51%). However, political risk - which could have included Brexit, was rated joint lowest with legal risk at 41%.
There is a picture emerging here of fear and dysfunction: never a reassuring combination.