January 25, 2018 / 4:35 PM / in 4 months

Breakingviews - City’s #MeToo moment is tipping point and catalyst

LONDON (Reuters Breakingviews) - The Presidents Club scandal increasingly looks like a tipping point. The 30-year-old charity has been forced to close because of fallout from a men-only event attended by businessmen at which female hostesses were groped and harassed. The furore will eventually subside, but justified public outrage should catalyse boardroom reform.

The Financial Times's front-page report on the Presidents Club closure, on Jan. 25, 2017

The two issues might seem separate. The propensity of corporate executives to breezily sexually harass women in an alcohol-fuelled atmosphere is one problem. The dearth of women at senior level appears to be quite another. But fixing the latter might help reduce the possibility of the former.

According to a review initiated by GlaxoSmithKline Chair Philip Hampton and ex-Economist Group Chief Executive Helen Alexander, women held just under 28 percent of FTSE 100 board seats last year. That’s more than double the 12.5 percent level of 2011, but progress was minimal compared with 2016. The review concluded that big changes were needed to hit a target for FTSE 350 boards of 33 percent by 2020.

The public outrage sparked by events at the Presidents Club gala will probably stop anyone proposing another men-only corporate gathering any time soon. But the resulting momentum, and campaigns against sexual harassment triggered by revelations in Hollywood, should encourage sensible chairmen and women to review the composition of their board.

The fear of looking out of touch with the public mood will make them want to look more like retailer Next, where more than 40 percent of executive and non-executive directors are female, rather than insurer Prudential, which has only 21 and 13 percent respectively.

Imagine a chastened C-suite sorts itself out and pushes female board representation to 50 percent. The conflation of conference room and locker room at corporate events – not to mention the scope for actual harassment – would then become unlikely as well as inappropriate. It might also mean a closing of the gap between what women and men are paid – the other key factor in the gender power imbalance. The ideal is a little closer if the Presidents Club momentum is sustained.

Breakingviews

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