Boards and dinner parties.

Boards are a bit like dinner parties.

That’s what I told a group of company secretaries from FTSE 100 companies yesterday, when I was invited to speak at a seminar organised by Capita Registrars. The topic was women on boards, based on a paper I have just had published in Significance, the Journal of the Royal Statistical Society.

I was thinking about a dinner party I gave on Saturday night. Apart from the fact that it was exhausting (I seemed to spend most of Saturday slow-roasting a tomato) I was mindful of a statistic I’d come across in a recent survey. It said:

1 in 10 people would rather go to the dentist than go to a dinner party.

Perhaps they’d been to one of mine.

In fact the evening hummed along nicely, with Mike and Barbara, a lovely couple from work. My friend Jayne who’s a life coach and her husband Neil who works for a charity. Then there was my Geoff, who’s an antiques dealer and his wife Julianne. She’s a counsellor.

The evening was fine. Probably because we’re all quite similar. We share the same values and beliefs. We all prefer Sauvignon blanc to Chardonnay and agree on where to buy the  best Parmiggiano Reggiano in London (at Camisa’s in Old Compton Street).

In short, we’re very comfortable in each other’s presence because we’re all white, middle-class, heterosexual baby-boomers from St Albans.

Not surprising that we all found ourselves around the same table. Psychological studies show that we seek out people who are like ourselves. Research from the University of Chicago even shows we are more likely to fall in love with someone who looks like us. At a social level, hanging out with like-minded people means we can affirm our own beliefs and values. We can confirm that we’re right in what we think.

But it does mean, if we’re not careful, that the conversation revolves around the topics we all know and care about. We’re in our comfort zone – sharing common ground with people who think like us.

But it’s when we do something different and put ourselves in the discomfort zone that growth and development happens.  

I asked myself after Saturday night whether I should have invited a more mixed group. Why, for example, didn’t I invite my neighbour’s son who’s an aspiring poet and unemployed? Or the lovely Indian couple I see every week at Tai Chi?

How on earth am I going to have my own values challenged, and see the world as it is for other people, if I only hang out with like-minded people who are clones of myself?

BOARDS

I think the same is true of boards. They’re a bit like dinner parties (except no-one’s had to slow roast a tomato and probably a little less Sauvignon Blanc gets consumed)….but they tend to recruit members who are just like them.

About ten years ago the Norwegian Trade and Industry manager, Asnager Gabrielsen noted that boards were mostly made up of men with very similar views and backgrounds who went hunting and fishing together.

This meant there was a huge risk of group-think in the boards’ decision-making processes, and a real lack of diverse perspectives. 

Norway brought in laws stating that board membership should be at least 40% female.

Since then Norway has enjoyed 3% economic growth and an 11% budget surplus, while many of its European neighbours were still in the depths of economic recession.

Some boards in the UK probably still resemble those that worried the Norwegians. To borrow a phrase from my friend Alan Newman, they are mostly male, pale and stale.

Let’s look at the stats:

•          Only 13.4% of FTSE 100 company directors are women.
•          And 14 of those companies have all male boards.

 Yet the evidence for women on the board boosting company performance is compelling (the recent Lord Davies report acknowledges this) even if you ignore the Norwegian example.

•          A study by Pepperdine University had shown that companies with just 3 women on the board of directors outperformed the competition on all measures by at least 40%.
•        Data from Gavurin Intelligence showed that a board that’s 30% female triples a company’s profitability.

      Whilst this is correlational data and doesn’t constitute causality, the evidence from multiple measures now shows that:

• ·       THE most influential determinant of higher ROE is gender diversity  
• ·       It is arguably one of the most cutting-edge business improvement strategies available today

No wonder other countries are following suit and advising boards to appoint more females, with the threat of introducing quotas if they fail to do so.

A supply Issue? Those opposed to quotas always point to a shortage of women with the necessary credentials.

I would argue that there's no shortage - just a short-sightedness on the part of those doing the selecting. I would also cite research from Harvard, MIT and Carnegie Business School showing that diversity is more important than expertise when creating the best groups.

And there is a lot of psychological research showing that adding women to a group ensures that

•          more diverse opinions and attitudes are expressed
•         decisions get questioned when information certainty is low (something that females are found to do more frequently)
•          discussions get broadened
•          the groups’s overall level of social sensitivity is increased

-     To quote Thomas Malone from Carnegie Mellon:

"Having a bunch of smart people in a group doesn't necessarily

 make the group smart”.

It’s having different people that makes the group smarter. 

Like inviting really different people to the dinner party, the group dynamic gets changed for the better. There’s more growth and development in the discomfort zone. 

Yet we all tend to hang around with people who are just like us.

Perhaps it’s time we all invited someone new to the party?

"There should never be too much testosterone in one room"

Why Christine Lagarde should be president of the IMF
 
1.     For saying “I honestly think that there should never be too much testosterone in one room."

2.     Because she speaks fluent French. OK she is French. But she also speaks fluent English. How brilliant is that?
 
3.     For being ballsy enough to state that “Gender-dominated environments are not good... particularly in the financial sector where there are too few women,"
 
4.     She says this about cooking: “Cooking is about giving”. Don’t you just love that?
 
5.     And for saying: "In gender-dominated environments, men have a tendency to... show how hairy chested they are, compared with the man who's sitting next to them.”

 
6.      And also for saying the 2008 financial collapse was driven by the aggressive, greedy, testosterone-fuelled mood of male-dominated, hi-tech trading rooms.
 
7.     For being hugely ambitious but wanting to spend more time cooking for her family or making apricot and quince jam. (That’s not strawberry or raspberry jam. It’s bloody apricot and quince I tell you.)

8.     For being reluctant to say there are female and male ways of dealing with power… “but based on my own experience, women will tend to be inclusive, to reach out more, to care a little more."

9.     A man said about her "Her lightning-quick wit, genuine warmth and ability to bridge divides while remaining fiercely loyal to French interests have been a source of admiration." 

(Timothy Geithner, US Secretary of the Treasury, Time, April 2009)

10.   Hotel chambermaids can feel totally safe in her presence.

Beach Psychology: Through the eyes of an alien

Location: A beach on Koh Samui. An alien and a human are observing holidaymakers.

Alien: What are these humans doing? Do they come here to sleep?

Human: No, they’re sunbathing.

Alien: Why do they worship the rays of this distant orb?

Human: Well, they like the feeling of warmth and they like the colour it turns their skin.

Alien: What colour is this?

Human: It turns them darker, they go brown.

Alien: And this darkness is beneficial to humans?

Human: Not exactly, too much can burn their skin.

Alien: Burn it? The orb’s rays can harm humans?

Human: Yes. It burns their skin. It ages it prematurely. And it can cause cancer, a potentially fatal disease.

Alien: Yet still they come?

Human: Yes. In fact they pay money to come. They er..enjoy it.

Alien: And do they do this for long, these beached ones?

Human: Oh yes, often all day, for a week or two.

Alien: Here comes a very browned one.

Human: Ah, that’s a beach seller. He isn’t a holiday-maker. He lives here and earns money by selling things to the holiday-makers.

Alien: The beached ones need the things he sells?

Human: Well, not eactly need…..

Alien: ..they want the wooden elephant with the spinning ears? They have been seeking that and he brings it?

Human: No they didn’t know they wanted it …look. It’s because they need to shop. It’s what they do.

Alien: Here is another browned one. He brings food. They are hungry the beached ones?

Human: Well, yes and no. They probably had a full english breakfast at their hotel and some of them will have sneaked a few cheese rolls into their bags. But the beach-seller knows they cannot resist ice-creams. And donuts. Oh and hot dogs.

Alien: Many of the beached ones are a great size. They do not move. Yet they consume the offerings of the beach seller? They seek to be his colour and a bigger size?

Human: Oh no, they’d prefer to be his slim shape.

Alien: This does not compute. The large beached ones burn their skins, they buy things they do not need, they over-consume to become a size they do not wish to be. Did you say they are paid great sums of money for this process?

Human: Er, no. They are the ones that pay. Excuse me, I'm off for...a lie down.

Are you financially prepared for retirement?

THANKS TO CERI WHEELDON FOR THIS GUEST BLOG.
Ceri's website www.fabafterfifty.com is packed full of articles, tips and advice for women celebrating being over 50 and feeling fab!


When facing retirement are we ever really ready?

With life expectancy increasing, and one in 7 women turning 50 this year likely to live to be 100, traditional retirement may be a thing of the past. 

Today, retirement presents an opportunity to ’relaunch’ our lives. It is important to be confident about your outlook and passionate about what lies ahead:

• When planning your retirement, set yourself a monthly budget equal to your projected  retirement income and try to live on it. Be realistic about  what your monthly expenditure is likely to be. You may be spending less on commuting daily, but you will have more leisure time and increased socialising normally means more expense! Not to mention that you will now have the time for all that travelling you didn’t quite get round to.
• Think about the financial  ‘benefits’ you may be losing such as private health cover and  life insurance- if these have been funded by your employer you will need to check out the costs of buying the cover privately.
• Make sure you have a complete picture of your financial situation- ask for current figures on your pension plans to have a realistic picture of what level of income your current pension  will deliver. Worryingly according to the Office of National Statistics It seems that the average pot for 56 year old women living in the UK stands at only £9,100.  This would generate an approximate income of around only £550 a year.

Recent changes to pension legislation also mean that women have to wait longer before being eligible to draw their state pension; women's state pension age rises to 65 by November 2018, and then to 66 by 6 April 2020.

If  you realise that you can’t really afford to fully retire as planned, look at the options available to you- do you want to work part-time?  93% of the new jobs created in the last 12 months are part-time so in theory this should work to your advantage.

If you need to look for full-time employment are your skills up to date?  Do you need to attend any training courses- have you budgeted for these? Are there any evening classes you can attend to fill any skills gap you feel you may have?

Also, once you reach state pension age, should you continue to work you cease to pay national insurance contributions, giving you an extra opportunity to save!

Have you always had a yearning to be your own boss? Now could be the time to set up your own business.  Statistics show that more businesses set up by the over 50s succeed than businesses founded by the under 30s. If you build up a business with the potential to be sold, as well providing an immediate income stream it could also provide you with a lump sum at a later date.

It’s never to early to start planning for retirement!

Thanks Ceri for reminding us that, if we prepare for retirement, we can look forward to so much more than a bus pass and a shopping trolley... as the inspiring stories on the www.fabafterfifty.com website testify.

Male entrepreneurs using social networks as an extension of the boardroom

Should a woman behave more like a man to make it to the top?

How much are male and female traits visible through social networks such as Twitter?

Here are a couple of tweets, one from a male and one from a female entrepreneur. Can you tell which is which?

I feel very sorry for you on the score last night! Want a tissue?

Just heard a fab quote re the role of a parent “our job is to give children the courage to go out into the world & a home to come back to”

OK, so it was dead easy to spot. The first was from a man and the second from a woman. 

But is that generally true of male and female entrepreneur tweeters or do female entrepreneurs have to emulate male traits? 

My team at the University of Hertfordshire have been busy researching just that…..

We analysed nearly 5,000 tweets from twelve influential entrepreneurs over one-month. 

Our results showed that male entrepreneurs tend to use social networking sites to compete and dominate whilst women use them to build networks.

We also showed that men ‘tweet’ about business 46% more than women.

In fact even their more casual conversations involve business. So they really do have one-track minds. A business track.

And when it comes to blatant self-promotion, the males again come out as the top tweeters.

They do a lot more of blowing their own trumpets, sounding off 61% more self-promotional tweets than their female counterparts.

Female tweets are more supportive, friendly and more lifestyle-y.

In fact the female entrepreneurs put out more than twice as many tweets about their non-business life than men. 

These top women also tweeted 77% more supportive and conversational content than males. They were more likely to join in an on-line chat, respond to others with a friendly comment or messages of support.

It seems from these new findings that men are using social media as an extension of the board room or the sports field - where they typically like to lead the competition and dominate. 

Women seem to use social media far less aggressively, using it more socially to build contacts and network with people, as is often the case in the ‘real world’. Yet many are matching their male entrpreneurial counterparts when it comes to generating wealth.

The top 5 entrepreneurs by how much they tweeted in one month (Jan-Feb 2011) are below. They have an estimated combined wealth of £1.28billion*

1. 

             1. Michelle Mone 1,030 tweets
2.    Lord Sugar 965 tweets
3.    Duncan Bannatyne 660 tweets
4.    Theo Paphitis 505 tweets
5.    Martha Lane Fox 275 tweets

*  According to data from the Sunday Times Rich List 2010 excluding Michelle Mone worth estimated £50m from http://www.guardian.co.uk/lifeandstyle/2010/sep/12/michelle-mone-lingerie-71-degrees-north Martha Lane Fox estimated £20m http://www.independent.co.uk/news/world/africa/net-multimillionaire-martha-lane-fox-seriously-injured-in-car-crash-in-morocco-562168.html

  

·       The University of Hertfordshire was awarded the Times Higher Education ‘Entrepreneurial University of the Year 2010’

Shop like a Zombie

Pasty-looking people with unfocussed eyes goggle menacingly at the shop’s window display, hands and faces pressed hard against the glass. Cabinets of sparking goods stand within. An unearthly moan of desire emanates from the frustrated crowd.

What’s this? A description of shoppers waiting for Primark’s doors to open on a Saturday morning?

No, it’s actually a scene from Romero’s film, the Dawn of the Dead. And the pasty-looking people aren’t shoppers. They're zombies.

But the scene does capture something that Philip Horne, in his article ‘I shopped with a Zombie’ descibes as the transformation of merchanise into a spectacle which, these days, seems to have a compulsive quality. And researchers have now identified the kinds of magical transformations that many shoppers expect when making purchases.

In her study Marsha Richins, from Trulaske College of Business, identified four types of expectations:

Transformation of the self

That’s the belief, commonly held by young people and people in new roles, that a purchase will change who you are and how people perceive you. For example, a woman interviewed for Richins study wanted to have cosmetic dental surgery because she thought it would improve her appearance and self-confidence.

Transformation of relationships 

Is the expectation that a purchase will improve your relationships with others. For example, a woman in the study wanted a new house as she thought then she'd entertain more often and make more friends.

Hedonic transformation

This is the belief that a purchase will make life more fun. For example, a man in the study believed a new mountain bike would give him more incentive to get out and go on "an adventure."

Efficacy transformation

is the expectation that purchases will make you more effective in your life. For example, some study participants believed buying a new car would make them more independent and self-reliant.

Nothing wrong with any of these reasons, you might think. They only become problematic when the purchaser spends the money and then, as often happens, doesn’t get the expected outcome. Because things like good relationships, independence, self-reliance and confidence come from working on your inner self, not from outer trappings.

Research shows that most people's beliefs about the life-transforming properties of their purchases are completely fallacious. Yet these beliefs are still very powerful motivators to spend. Worse still, if you have strong and unrealistic transformational beliefs you are more likely to overuse credit and take on excessive debt.

In Romero’s film the zombies rise from their graves and stagger to the shopping mall. What a shame no-one told them those glittering prizes wouldn’t be life-transforming.

Just when you thought it was safe to go back to the office.....

the toddler gets chicken pox, the after-school club gets axed and your childminder emigrates to Siberia in search of an easier life.

Working mums have been a regular blog topic here on Sheconomics, and we've been lucky enough to have Becky from Babybudgeting give her view on family finance as well as the fabulous Jessica Chivers giving us a sneaky heads-up on her new book Mothers Work!


So I guess those two ladies, with their fingers on the pulse of the working mum, won't be surprised to hear that 'desperate need of money' drove 80% of mums surveyed by Philips AVENT back to the day job. 


That still leaves one in five mums returning for the sake of their sanity, rather than for the salary, which is something that Jessica's research had highlighted. In Mothers Work! Jessica talks about how mums cope with (apart from the guilt) the crippling costs of childcare and how some mums simply couldn't afford to go back to work. The Philips AVENT survey showed that almost half of them get round this by roping in the grandparents. A further 40% decided that the average £4,280 a year that childcare costs simply made it not even worth thinking about getting the business suit back on. That figure is a modest estimate, according to Jessica, who says the cost of employing a nanny can escalate to £22,220 p.a. outside London.


Jessica's view is that parents need to get creative about the way they organise childcare, and they need to become better negotiators. That includes pay rises, not being shy about promotion and asking for flexible working, an arrangement that appealed to 70% of the Philips AVENT respondents. 


Becky has lots of good advice on how to manage a budget that's been squeezed by the arrival of a baby and you can watch her discussing it here with money advisor Sue Hayward. 

Weirder than fiction!

If you wonder what really led to the economic crash of 2008 then I urge you go and see Inside Job, the film directed by Charles Ferguson.

It starts with a chilling re-run of the events in the decade leading up to the crisis and then exposes the recklessness, corruption and utter denial of those who let it happen, and even profited from it.

“Inside Job was well received by film critics who praised its pacing, research and explanation of complex material.”

It’s straight-talking, it’s fact and it’s scarier than fiction.

You couldn’t make it up.

New money advice service launched

Are you one of the many women who, when it  comes to asking for advice about money, has no idea where to go? The friendly bank manager is now a distant memory and even friends you trust can offer nothing but financial horror stories.

Or perhaps you’re scared about approaching organisations who offer ‘advice’ for fear you’ll get sold something you don’t want, or get charged for advice?

We’d like to allay those worries and point you to a safe pair of hands.

The Money Advice Service.

It’s the government advice service (formally the Consumer Financial Education Body) launched today that really does offer free, impartial money advice. 

We think it's a friendly site that's easy to browse without getting tripped up by horrid jargon. Perhaps it's the green colour scheme and homely images that makes it particularly relaxing and non-threatening? And there are free printed guides on offer, as well as face-to-face services and a free helpline (0300 500 5000).

A big plus is that it's very female friendly, with great sections on childcare, finance for parents, and help with those less-than-happy events like divorce and redundancy.

We particularly like the way they acknowledge that seeking financial advice isn't just a fact-finding exercise, and that money induces a lot of anxiety in people. There's a section headed 'Money Worries' especially for those wobbly times.

Check out www.moneyadviceservice.org.uk

The value of a mum in cash terms is £?

WE'RE VERY HAPPY TO HAVE A VISIT FROM BECKY FROM BABYBUDGETING.CO.UK WHO IS OUR GUEST BLOGGER TODAY.

HERE'S WHAT BECKY HAS TO SAY:

Hi I'm Becky and I blog over at Baby Budgeting (www.babybudgeting.co.uk) a 

website for families trying to be savvy with their finances. I am also the 

author of How to afford timeoff with your baby (Vermilion 09)I am a  stay at 

home mum and freelance writer and I do everything around the home. I should 

be a rich womn apparently!

Legal & General have just released some research which finds that the unpaid 

work a Mum does around the home would cost £30,032 to replace (and the 

equivalent for a Dad would cost £21,306).

Here are some more nuggets ( to be used when you need them!) from the 

“Value of a Mum” survey :

-       Despite many Mums working they still spend an extra nine hours a 

week with the children compared to Dads.

-       Mums are still feeling that the burden of looking after the home 

falls to them, with 45% wishing that their partners would do more to help 

with housework and childcare.

-       Even those mums who have part-time jobs don’t hugely reduce the 

amount of time dedicated to parenting – the value of part-time worker mums 

is £28,664 compared to the value of those who don’t work, £31,523

-       The day to day costs of looking after children have gone up 8.3% 

over the last two years, rising from £132 a week to £143 and a massive 31% 

since 1999 when the figure was £109.

Mums do really important unpaid work around the home and they are 

increasingly combining this with a full or part-time job, which means that 

their families are getting pretty good value for their efforts!

The research highlights just how easy it is to underestimate the value of 

the unpaid work parents do and the importance of planning for a future where 

one parent may be unable to work due to illness or bereavement.  It shows 

that 42% of mums and dads feel people should have financial protection in 

place in case anything were to happen to them, but in reality only a quarter 

(24%) of them actually do.

So where’s my 30k then?


Has anyone seen it...?



THANKS BECKY.
DON'T FORGET TO POP OVER TO HER SITE FOR LOTS OF FAMILY FINANCE TIPS