When it comes to gender diversity at board and senior management level, the oil and gas sector has a lot to be concerned about. It trails almost all major sectors of the global economy in terms of female inclusiveness. Out of the trio of major stock listing locales for oil and gas companies – namely London, New York and Toronto – it’s the British finance hub that comes worse off.
Having adopted a voluntary business-led approach to increasing female representation at senior levels, the UK government has set an ambitious target for FTSE100 companies to have 25% female board members by 2015. Yet, hardly any City survey seems to suggest the target would be met in general, and not a single one points to oil and gas companies leading the way.
One recent survey, conducted by PricewaterhouseCoopers , found that just 11% of members on the board of directors in the 20 largest London-listed oil and gas companies were women. None had more than 30% of board of director positions occupied by women.
Furthermore, PwC also noted the UK had a limited pipeline of women in senior management positions within the sector, with only 8% of seats on the management board held by women, of which 30% are in a corporate secretary or legal counsel role. Neither is likely to lead to a position on the board of directors.
Diversity challenge is tougher for the sector as many talented senior female executives don’t view the oil and gas business to be a very appealing industry. Donna Chapman, Vice President (Europe) and Director of global oil and gas recruitment firm Air Energi, feels that’s partly because the country needs to do more to encourage STEM (science, technology, engineering or mathematics) subjects at schools and colleges ahead of choice of degree.
“It’s the case for both boys and girls who are unaware of opportunities in the engineering and oil and gas sector. We have an acute shortage of skills globally (not just the UK) regardless of gender. As with everything, we need to consciously remove dated perceptions at a very early age if we are to attract talent.”
Early exposure to the sector certainly influences the mindset. Denise Lay, Chief Financial Officer of Tethys Petroleum and a former Chevron CVX -0.12%executive, says in her case being comfortable and rising through the ranks within the sector was came courtesy of a career journey that involved a glimpse into it from a very early stage.
“A stint with KPMG included going on a secondment to Russia, getting to grips with the sector, being sent out to difficult locations and getting involved with the advisory, banking and finance side of the industry. So when opportunities arose, first at Chevron, and now Tethys Petroleum, they became natural career choices rather than a fear of the unknown.”
To counter the gender diversity problem, some in UK policymaking circles have proposed a 25% mandatory quota for female board representation. The concept is not new; Norway already has a 40% quota, while another nine countries including Italy and France are contemplating similar moves. However, many senior UK female industry executives are not in favor of it.
“Personally, maybe a gentle nudge or dangling the specter of a mandatory quota is what’s needed. Yet, I remain inherently uncomfortable with idea of it being enshrined in corporate norms. However positive the intent is, a quota would end up belittling those who’ve worked their way up the corporate ladder with all things being equal. Thoroughly merited appointments would also face accusations of tokenism,” says Lay.
Recounting her own journey, she adds that self belief and hard work propelled her through to where she is. “And I’m no different to any other aspiring female executive. Maybe as a woman you do have to work harder than a man and fight the stereotypes, but I don’t feel I am consciously working differently to dispel those stereotypes. None of the companies I have been involved with have ever given me any impression over the decades that there were barriers in the way of my career progression.”
Empirical evidence does point to tokenism where quotas are in place. For example, in line with the country’s quota, Norway’s oil and gas sector sees 42% of women on company boards. However, PwC found that only 6% had management and executive authority, a figure that’s worse than Australia (15%), Canada (9%), UK (8%) and US (14%).
Chapman also remains unconvinced about quotas. “It should always be the case of the best person for the job. Quotas could potentially devalue senior appointments of women as a quota appointment rather than the right person gets appointed.”
Barbara Spurrier, Group Finance Director at Frontier Resources, who also juggles directorships at other British companies, is not in favor of quotas either. “Inclusion of capable women on company boards, while starting from a low base, has come a long way over the last 15 years. More needs to be done, but the sector is visibly attempting to change things. The value of having a woman on the board in order to bring about a more balanced perspective to the decision making process is not lost on the oil and gas business.”
In many ways, smaller independent upstarts, from oilfield services and technology firms to exploration and production companies, are leading the way. Many are quoted on the London Stock Exchange ’s Alternative Investment Market (AIM).
“Companies at the smaller end are newer businesses. They neither have a traditional mindset nor a legacy burden on the issue of senior appointments. While every oil and gas company is trying to be more inclusive and gender diverse, it’s easier for a small cap to get there faster, or actually begin with a diverse board at the time of an IPO. Legacy companies don’t have that luxury,” Spurrier says.
However, Dr Liane Smith, Managing Director at Wood Group Intetech, feels there is room for a bit of positive discrimination. “I often see women questioning themselves – sometimes even at an interview – about whether they have what it takes for promotion. I think a lot of male interviewers would read that as lack of capability and move to the next, usually male candidate, whereas I challenge them by asking “Why do you feel like that? What skills are you lacking?””
“I usually get through that doubt to the inner strength of the individual. It is for this reason that I do think, controversially, about there being a place for positive discrimination. However, I don’t believe in assigning quotas, just giving the female candidate the benefit of the doubt in a close decision situation.”
And the former Shell engineer believes gender diversity in the engineering profession clearly needs to be brought into the equation. “The fact that women don’t tend to think of the sector as their first choice for a career in management or business simply reflects that oil and gas operator boards are generally high in engineer-managers, and that women are underrepresented in the engineering profession. This really says more about women and engineering than women and management in oil and gas sector.”
The words of the aforementioned should give food for thought to the UK government, which recently lent its support to an initiative called POWERful Women. It has set a pragmatic aim of having 30% of executive energy company board members to be female by 2030 and 40% of energy company middle management to be female by 2030. Message from those who’ve made it seems to be that a quota system isn’t the simplistic answer to a complex challenge requiring grassroots change.