Why it’s so important for boards to be diverse

Hedwige Nuyens, Managing Director of the International Banking Federation, talks about the significance of the EU’s Women on Boards Directive in the latest webinar of the CJBS Perspectives series.

One of 7 daughters born to parents in Belgium who desperately wanted a son, Hedwige Nuyens, Managing Director of the International Banking Federation and Chair of European Women on Boards, says she came into the world with “no expectation at all”.

Consequently, when she was a very young girl, she promised herself that if she rose to a position of influence one day, she would do something to level the playing field for other females. And she has stayed true to her younger self, mentoring younger talent throughout her career in a push for greater diversity and inclusion in companies and society.

The passage of the EU’s Women on Boards Directive in November 2022 was a highlight of Nuyens’s career, as European Women on Boards played a pivotal role in this. The Directive, which had been blocked by the Council of the European Union for a decade, requires stock-listed companies to have at least 40% of non-executive director posts, or one-third of all director posts, filled by women by July 2026.

Nuyens was interviewed by Simon Taylor, Management Practice Professor of Finance and Director of the Global Executive MBA programme at Cambridge Judge Business School, as part of CJBS Perspectives: Leadership in Unprecedented Times, a series of talks with prominent business leaders and other public figures organised by the Alumni & External Engagement team at Cambridge Judge.

Here are edited excerpts of her thoughts:

Women must understand the system to change the system. If you want to make a career in a traditional banking sector – and it’s true for many other industries – you need to be visible. You need to network. You need to be known by people and also let other people know what you want, what you can bring to the table. I thought that perhaps there was a learning point that I could share with others so, very early in my career, I started to mentor, to rally with other women and see how we could be stronger together.

It’s not about copying what men are doing. It’s about trying to understand the system. If women understand the system and how to make it work for them, how to influence decision-making, then they can change the system itself.

It’s not about women for women’s sake. The crucial element of the Women on Boards Directive is that it calls for “transparent selection procedures”. Companies must have an objective and be able to explain why the person they are nominating is the best candidate. This avoids the trick of the quota where women don’t want to be nominated because they are women, but the Directive actually reverses this: you can nominate a candidate but, if it’s a man and you don’t have 40% women on the board, you have to explain why there was no woman and why this man is the best candidate.

The directive prevents cultural differences from being used as an excuse. For national regulation in every country, we need to balance the fine line between saying you have to do it, and understanding how you can do it in the best possible way by understanding what underlying issue might be the blocking factor.

Our first objective is to create a talent pool of one thousand women who are ready and eager to take on those positions, not only board but also C-suite. We want to engage in dialogue with companies, reaching out to see how we can help with nominations and talent. We also work with executive search firms. It’s not only about women, it’s about all women and, in our talent pool of one thousand women, we make sure that we have at least 20% coming from underrepresented groups.

Using all talent is right and effective. We are looking to have as many male allies as we can. This is so important because it’s not just a women’s organisation, it’s not just a women’s issue. Using all talent is the right thing to do and will actually help to have much better, and much better-performing, companies.

The banking industry is now at the forefront of change. Finance has traditionally been very conservative but, after the financial crisis in 2008, change is happening more quickly in the banking industry than elsewhere. More scrutiny from external auditors and supervisors increases the focus on diversity and risk management.

Young people should never forget the power of networking. It’s so important to be part of an alumni network like the one in Cambridge. Don’t stay alone. You know the power of social media, but it’s really very useful in a professional career as well.