By Dina Medland in London
On a fundamental level, good governance is about good behaviour, and conduct contributes to culture – whether it is business culture, or what is considered acceptable in civil society. In Britain, in corporate governance circles we talk about the need to ‘tone from the top’, with the implication being that those in leadership roles set an example by their behaviour. But when the media headlines are full of revelations about sexual harassment in the corridors of political power, and the country has a female Prime Minister, it all starts to get interesting in terms of the winds of change.
On November 1, Sir Michael Fallon resigned as UK Defence Secretary, saying his conduct may have “fallen short” of the standards expected by the country’s military. But he is still a Member of Parliament, which raises interesting questions about standards for different roles. At time of writing, we do not know exactly why he resigned, but social media has been quick to suggest that he would only have done so if he felt under considerable pressure.
His resignation bears witness to the rise of a very new sentiment in the UK: a refusal to be silent, to be a victim, to assume some issues are taboo, to gloss over the truth, and demand more from those who are in positions of power. As women (and men) of all ages have - with the help of the media and social media and the #MeToo hashtag - been speaking out from all walks of life on their experiences with sexual harassment, they have painted a vivid picture of the abuse of power.
Is this important in business circles? You bet. A recent report by INSEAD, the business school, speaks of corporate governance as “a domain where tradition plays an important role and change is not always welcomed.” I covered the report, which looks at the role of the Chair across various geographies in a post on my blog, Board Talk.’ If you ask Google ‘what is tradition?’ you get: “the transmission of customs or beliefs from generation to generation, or the fact of being passed on in this way.”
In other words, ‘tradition’ is also about the passing on of culture. Any change in culture for better governance is unlikely to come about without questioning and re-aligning what is acceptable in that culture. It is as true in business as it is in politics and civil society. When he resigned, Sir Michael Fallon said:” The culture has changed over the years, what might have been acceptable 15, 10 years ago is clearly not acceptable now.”
The World Economic Forum Global Gender Gap Report 2017 reveals that the UK stands in 53rd position for equal pay for equal work. Research on the gender pay gap by the UK’s Chartered Management Institute shows bonus payments exacerbate the problem, with the gender bonus gap across all managers standing at 46.9 %. This increases considerably at C-suite level, where the average bonus for a male CEO is £89,230 compared to £14,945 for a woman, amounting to an 83% bonus pay gap.
This is nothing but inequality masquerading as something else – perhaps it is culture, so often conveniently described as ‘hard to talk about’, difficult to quantify. But the walls are beginning to come down on that argument across the board as women find their voices and their support from each other on multiple fronts. Events that make the media headlines scream of societal change, and all businesses need to pay attention.
Female Chair, Female CEO
It seems fitting that a challenger bank, Virgin Money, is set to have an entirely female leadership team. At the Golden Peacock Awards held in London by the Indian Institute of Directors, CEO Jayne Ann Gadhia confirmed a leaked story – that Virgin Money intends to appoint Irene Dorner as chairman.
She will replace Glen Moreno, who announced his departure in the summer. Ms Gadhia spoke of the benefits she had gained from working closely with Mr Moreno. “We tend to copy the people we are supported by” she said, demonstrating once again how culture can be passed down the line.