It is widely accepted in both the charity and corporate sectors that a diverse board is more likely to be an effective board. Both the Good Governance code and the Charity Commission highlight the importance of appointing trustees who represent the charity stakeholders, the community and beneficiaries. A collection of trustees from diverse race, age, gender, disability and social backgrounds can 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 finance, an industry traditionally dominated by men.
It strikes me that there is good female representation in the charity sector as a whole, and statistics published for national Trustees' Week confirm this by showing that 43.4 per cent of charity trustees in England and Wales are women. I am fortunate that the team in which I work is also equally balanced.
The charity sector is ahead of the corporate sector in this regard. Lord Davies of Abersoch's report on gender imbalance in the top UK companies, published in February 2011, called on chairs of FTSE 100 companies to aim for at least 25 per cent of those on boards to be women by 2015. Progress has been made since then, when women made up only 12.5 percent of these boards; today that figure is 24 per cent.
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. When I meet 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 women off?
Perhaps it is the jargon that acts as a barrier to trustees who don't work in the finance industry; perhaps it is an alignment with traditional gender roles where women are less likely to engage in money matters; or perhaps (like politics) finance suffers from an image problem because of its 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 I should mention what are perceived to be typical male and female traits in the hope of promoting debate on finance committees. Research shows that the typical woman is less prone to risk-taking than the typical man, largely because of the lower levels of testosterone. The US financial research firm Rothstein Kass US last year attempted to show how this might translate into investment management: it found that men were likely to trade more frequently and were more susceptible to over-confidence than women, holding on to bad investments for too long. This led to worse performance by the male investment managers in the survey.
The perception of the worlds of finance and investment as preserves of men is damaging. Finance committees are a crucial part of the governance structure of a charity, and diversity in all layers of governance is important. Balancing your board could be as important as balancing your books.
Kate Rogers is client director at Cazenove Charities