Strategic HRM Gender Balance Jason Cates

Contents

Contents Page 1

Preface 2

Executive Summary 3

Context

Current Laws and Guidelines 4

Macro-Economic Environment 5

Major Issues

Broad Industrial Issues 6

Corporate Breakthroughs 7

Conclusions 9

Recommendations

Davies Report 10

Company Specific 10

Formalities

Harvard Referencing 11

Word Count/Word Limit: 2758/3000

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Strategic HRM Gender Balance Jason Cates

PrefaceBAE Systems is a multinational aerospace and defence firm with its headquarters located in London

and its main share listing on the London Stock Exchange FTSE 100 index. The company had 93,500

employees worldwide in 2011 with the bulk of these being employed in the UK and US. (BAE,

2012f)(BAE 2012g)

BAE’s current operations include the assembly of a range of military projects. These include

the Queen Elizabeth class aircraft carriers and the Astute class submarines for the UK government.

BAE is also involved in the development and assemble of the Eurofighter Typhoon and F-35

Lightning II jet fighters which are sold to varies markets including the US and Saudi Arabia. (BBC,

2006) (Global Security, 2006)

Sales in 2011 stood at £19,154m (€23,211m) with net profit for the year standing at £1,260M

(€1,526m). This saw a 14% fall in company sales in 2011, but due to significant cost savings being

made, net profit increased by 27% in the same year. (BAE, 2012g)

BAE’s current board of director is made up of twelve members consisting of its Chairman

Dick Olver, three executive directors and eight non-executive directors. Three of these positions are

currently held by women with Paula Reynolds being the most recently appointed in 2011 as a non-

executive director. (BAE, 2012g)

“We continue to evaluate our governance arrangements against our own experiences and changes in

best practice.”

Dick Olver, Chairman (BAE, 2012g)

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Executive SummaryCurrent Laws and Guidelines

BAE’s current European operations are mainly focused in the UK and Sweden. The governments in

both countries are currently against imposing quotas concerning the enforcement of gender balance on

company boards. However, if current targets are not met, quotas may be imposed at a later date. The

European commission has also suggested using quotas if the current situation is not improved.

Current Performance

BAE Systems currently meets the recommendations of the Davies report. This includes a

quarter of BAE’s board of directors being women. However, this currently falls short of the EU’s

2015 and 2020 targets of 30 and 40 per cent respectively.

9% of BAE’s new recruits in the last year have been female; this is compared to the industrial

average of 2%. In terms of graduate recruitment, BAE is currently in line with the rest of the industry

with women making up 12% of new recruits.

Macro-Economic Environment

Austerity programmes in many of our key markets as well as the withdrawal of allied troops

from Iraq has seen company revenues fall in recent years. This has caused us to make a number of

redundancies over the last year as well as reduce the number of new engineers we recruit. This will

see progress slow over the next few years in regards to employing more women into the company.

Recommendations

Increase female representation on the board of directors in line with current EU targets. (30%

by 2015 and 40% by 2020)

Increase female graduate recruitment to 16% of total by 2015.

Appropriate disclosure of information regarding pay differences between men and women

and action being taken to address such differences.

Continue and strengthen our participation in training programmes promoting female

participation and leadership within the industry.

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Strategic HRM Gender Balance Jason Cates

ContextThis report will focus on the changing enthuses on gender balance within the European corporate

environment. It will then consider how this may affect BAE’s future recruitment and HR policy.

Recommendations will then be made on how to address these considerations.

Current Laws and Guidelines

Our main markets outside the UK and US are Saudi Arabia, India and Australia. However,

BAE also has operations in Sweden upon the acquisition of a number of subsidiaries there. Therefore,

as this report is focusing on BAE’s European operations, it will mainly be focusing on BAE’s

operations in both Sweden and the UK. (BAE, 2012a)

The respective authorities in both countries are currently against imposing quotas in regards

to the number of women companies should appoint to their boards. However, actual performance

concerning this issue is at a stark contrast when comparing the UK’s performance with that of

Sweden. Sweden is currently one of the world’s top performers with a quarter of its board

membership being women. This is compared to the UK’s 15% female membership. (Sweden, 2012)

The basis of this is the cultural belief in Sweden that sharing power equally regardless of

gender makes a society more democratic and just. This has been put into practice through the use of

“a well-developed welfare system” allowing both genders to balance their family lives with their

working lives. It is also emphasised within the countries education system with women being awarded

two-thirds of Sweden’s undergraduate degrees. This has helped Swedish companies achieve this 25%

figure in regards female board membership. As such, the need for quotas is not as prominent in

Sweden as it may be for other countries in which we operate. (Sweden, 2012)

In terms of the UK, Business Secretary Vince Cable has stated he is against imposing quotas

and that the UK was “making the voluntary approach work”. This includes having a target of 25% to

be achieved by 2015 in regards to the proportion of board membership being women. This is

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compared to the current figure of 15% being achieved by FTSE 100 companies. BAE currently meets

this target with a quarter of its board being female. (City AM, 2012)(BAE, 2012b) (BBC, 2011a)

Although this policy of targets over quotas is currently being followed in both Sweden and

the UK, there is a possibility that this might change in the near future. Future changes concerning

these policies may likely come from the European Commission which will override the current views

held by both, the Swedish and British governments. This is an issue we’ll have to be consider when

determining future HR policy. (BBC, 2012a)

It is the view of Viviane Reding, the EU’s Justice Commissioner, that even though she would

rather not use quotas, current national policies have so far “not brought about satisfactory results". As

such, the commission is open to imposing such quotas if current increases in gender balances are not

accelerated. This includes aiming for EU wide targets of 30% by 2015 and 40% by 2020. (BBC,

2012b)(City AM, 2012)

This is an issue we’ll have to consider regarding future appointments to the board. This is due to BAE

being 5% short of Reding’s 2015 target. As such, we must ensure appropriate action is taken at the

earliest opportunity in preparation of potential quotas being implemented. This will better place the

organisation in the longer time regarding this issue. (City AM, 2012)

Macro-Economic Environment

Governmental austerity programmes and the withdrawal of allied troops from Iraq have seen

the defence budgets of many of our key markets scaled back. This has had a negative impact on

company performance with revenues falling by 14% in 2011. This has meant that cost savings have

had to be made including scaling back recruitment and the implementation 2942 redundancies. This

has included a number of women being made redundant as well as a reduction in the number of new

women being recruited into the organisation. This scaling back of the workforce will likely slow

progress being made in regard improving the gender balance within the company workforce. Again,

this is an issue that will have to be appropriately considered and planned for in order to ensure the

issue remains at the forefront of BAE’s HR policy. (BBC, 2011b)(BBC, 2012c)(BAE, 2012c)

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Major IssuesIndustrial Issues

First Woman Awards

The “first woman awards” supported by the Institution of Mechanical Engineers has established the

“First Woman in Engineering and Manufacturing” award. The aim of the award is to recognise and

promote the role of women in the traditionally male dominated industries. This is due to the UK

currently lagging behind in regards to the proportion of its engineers being women. (Currently 8%

compared to Portugal’s 40%) The awards were founded in 2004 by Real Business and the CBI with a

previous winner being Rosalind Murray, a submarine designer here at BAE. (PE, 2012)

Further Education and Development

Semta in partnership with EAL, the engineering industries qualifications body, have

developed a new qualification aimed at aiding female career progression in traditionally male

dominated industries. This includes the UK engineering industry and is jointly funded by employers,

Semta and the UKCES employer investment fund. This involves making £400 available to each

woman to help develop the skills needed to fulfil senior management positions such as effective

communication skills. It is said to have benefitted 350 women so far including 100 here at BAE

systems. (ET, 2012)(PandCT, 2012)

“It really has made a difference to my confidence as now I feel more comfortable in applying for

more managerial roles, to get the best out of my potential."

Stephanie Otoole, Senior Materials Planner at BAE Systems (ET, 2012)

The UK government in conjunction with engineering employers has also developed the

“Skills 2020” strategy. The aim of this strategy is to develop and fill the skills gap currently faced in

the UK engineering industry. This is particularly aimed at women who are continuously encouraged

and monitored during their “career skills development”. It is hoped this will help support more

women in gaining leadership roles in companies such as our own. (Opportunity Now, 2012)

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Corporate Breakthroughs

Leaders share their secrets

We have recently held host to several senior female personnel from the military including

Malinda Dunn, a “retired US Army Brigadier”. This event allowed women in our organisation to

network and share stories about balancing their private and professional lives. It has also given them

the opportunity to discuss “the need for greater diversity” and the effect this will have on BAE’s

future performance. (BAE, 2012d)

Mentoring in action

BAE has also implemented a new mentoring scheme to help guide and support new potential

leaders within the organisation. This includes the implementation of “speed-mentoring”. This allows

employees including women to network and raise issues with multiple managers in an informal

environment. This allows employees to build networks that will last for the rest of their careers. We

are also training line managers to help support and motivate female employees to reach their full

potential within the organisation. It is hoped that this will increase the number of female trainees on

BAE’s leadership programme to 20% of total participants. (BAE, 2012d)(Equal Opportunities, 2011)

Women’s network

We have also established a women’s network within our munitions division as well as a

companywide “Women’s Forum”. These give women the opportunity to share experiences and are

based around building self-confidence and sharing insights into achieving future success. Our

munitions network was founded with the help of International Women of Excellence and is based on a

similar network established at IBM. It is hoped this will give our female employees increasing

opportunities for career progression here at BAE Systems. (BAE, 2012d)

“The Global Women’s Forum was especially useful because it addressed the aversion many women

feel towards self-promotion in the workplace”

BAE Employee (ET, 2012)

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Work-life balance

BAE also allows for more flexibility concerning employee working arrangements. This

allows for more diversity within our workforce providing employees with outside commitments the

flexibility to join our workforce. This also “improves organisational efficiency” providing BAE with a

more flexible workforce. This reduces the need for future redundancies in times of falling customer

demand and industrial uncertainty. (BAE, 2012d)

Recognition of female employees

In June 2010, BAE’s commercial director Michelle Rushbrooke won the “first woman award”

in the manufacturing category as discussed earlier in the report. Our corporate responsibility director

Dr Deborah Allen was also a finalist in the award category. Helen Barratt, a construction capability

manager here at BAE, won the award in 2009. This was awarded based on the role she played in the

development and delivery of the Astute class nuclear submarine for the UK government. Helen, like

many of the women we’re trying to promote at BAE, worked her way up the organisation over time.

She first joined BAE in 1985 as an administration assistant and joined the construction environment

in 1997. She was promoted to her current position in 2009 overseeing “submarine construction

capabilities” here at BAE. (Where to Work, 2009) (Where to Work, 2010)

BAE recently appointed 17 year old Micha Knight as the 1st woman since the 1980s to be

recruited as an apprentice wielder at the Barrow shipyards. She was previously turned down for a

position as an electrician at the shipyards. However, after attending college and gaining an NVQ in

wielding, BAE then decided to give her an apprenticeship at the shipyards and is currently

progressing beyond anyone’s expectations. (BAE, 2012e)

Implementation of “Skills 2020”

We at BAE see the “Skills 2020” strategy as a way of breaking the perception that the

engineering profession is a male only industry. This is being done by us going into schools and

talking with the potential engineers of the future, both male and female. So far, initial responses have

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shown “90%” of young people have had a positive shift in their perception of the engineering industry

due to these workshops. This has helped BAE increase its annual female employee intake to 9% of

total and 12% in terms of graduate recruitment. This is compared to the industrial average of 2% of

total recruitment and 8-16% in terms of graduate recruitment. This sees 19% of BAE’s global

workforce and 17% of BAE’s Executive Committee being female. Even though this is a rise in female

recruitment, we still far to go in terms of having a gender balanced workforce. (Equal Opportunities,

2011) (BAE, 2012g)

Santander awards

In 2011, BAE won the "Inspiring the Workforce of the Future" award which is sponsored by

the Spanish bank Santander. This was awarded based on our work in inspiring female career

aspiration within the engineering industry. This work is shown in our above average recruitment of

women into our workforce when compared to the rest of our industry. This proves that BAE is a role

model for the rest of the industry and is leading the way in having a gender balanced workforce.

(Equal Opportunities, 2011)

Conclusions

In conclusion, BAE as stated above has proven itself as a role model for the industry.

Nonetheless, improvements still need to be made which will all be outlined in the recommendations

that follow. These recommendations will consider the expectations of local governments as well as

the European Commission. However, these recommendations will also be realistically achievable and

appropriate to BAE. This is to ensure the effectiveness of the board is upheld. As forcing new

vacancies into the board simply to comply with diversity targets may compromise board efficiency

and corporate effectiveness

It is hoped that these recommendations will see BAE retain its position as a role model within

the industry. These will keep us ahead of the situation if and when future quotas are imposed ensuring

corporate effectiveness and long term stability is maintained.

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RecommendationsDavies Report (BBC, 2011a)

This report endorses the recommendations of the Davies report as a bare minimum for future

performance regarding gender balance here at BAE Systems. These recommendations are as follows;

Clear objectives concerning the proportion of women we intend to have on our board by 2015

This should match or exceed our current proportion of 25%

Annual disclosure of information regarding female representation on our board of directors,

as well as in our senior executive roles and BAE as a whole.

An open recruitment process and “meaningful disclosure” of information regarding how we

intend to increase diversity within our organisation. This includes the need for equal gender

representative within BAE Systems in all stages of the decision making process.

Company Specific (City AM, 2012) (Equal Opportunities, 2011)

However, due to the significant progress BAE has made in recent years, we envisage BAE aiming

for more ambitious targets concerning gender balance. This will see us exceeding the above

recommendations and come more into line with the expectations of the European Commission.

Our company specific recommendations are as follows;

Increase female representation on the board of directors in line with current EU targets. (30%

by 2015 and 40% by 2020)

Increase female graduate recruitment to 16% of total by 2015. This will see us at the higher

end of the industrial average in regards to female graduate recruitment.

Appropriate disclosure of information regarding pay differences between men and women

and action being taken to address such differences.

Continue and strengthen our participation in training programmes promoting female

participation and leadership within the industry. This includes taking full advantage of

government and social funding made available for such training.

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Harvard ReferencingBAE (2012a) About US. Available at: http://www.baesystems.com/AboutUs/ [Accessed: 2nd April

2012]

BAE (2012b) Our Board of Directors. Available at:

http://www.baesystems.com/our-company-rus/our-people/board-of-directors?

_afrLoop=23695764538000&_afrWindowMode=0&_afrWindowId=null#%40%3F_afrWindowId

%3Dnull%26_afrLoop%3D23695764538000%26_afrWindowMode%3D0%26_adf.ctrl-state

%3Dfm0w969n7_4 [Accessed: 2nd April 2012]

BAE (2012c) Strategic Review: BAE Systems at a Glance. Available at:

http://ara2011.baesystems.com/strategic_review/index.html [Accessed: 2nd April 2012]

BAE (2012d) Diversity and Inclusion: Developing an inclusive workplace. Available at:

http://www.baesystems.com/our-company-rus/corporate-responsibility/working-responsibly/

investing-in-our-people/diversity-and-inclusion/developing-an-inclusive-

workplace;baeSessionId=1KL4P2yYhknKVmyy0Mt9ncx49GHWJdvR9JGv0g5jZyzv8hXgP1tg!

1084437069?_afrLoop=72648614112000&_afrWindowMode=0&_afrWindowId=null#

%40%3F_afrWindowId%3Dnull%26_afrLoop%3D72648614112000%26_afrWindowMode

%3D0%26_adf.ctrl-state%3D188e7xvu5o_4 [Accessed: 2nd April 2012]

BAE (2012e) Micha bears the torch for women engineers. Available at:

http://www.astuteclass.com/2012/01/micha-bears-the-torch-for-women-engineers-2/ [Accessed: 2nd

April 2012]

BAE (2012f) Company Info. Available at: http://www.baesystems.com/CompanyInfo/index.htm

[Accessed: 2nd April 2012]

BAE (2012g) BAE Annual Report 2011. Available at: http://bae-systems-investor-relations-

v2.production.investis.com/~/media/Files/B/BAE-Systems-Investor-Relations-V2/PDFs/results-and-

reports/reports/2012/ar-2011.pdf [Accessed: 2nd April 2012]

BBC (2006) Saudi Arabia buys 72 Eurofighters. Available at:

http://news.bbc.co.uk/1/hi/business/5262120.stm [Accessed: 2nd April 2012]

BBC (2011a) Davies report calls for more women in boardroom. Available at:

http://www.bbc.co.uk/news/12560121 [Accessed: 2nd April 2012]

BBC (2011b) BAE Systems to announce nearly 3,000 job cuts. Available at:

http://www.bbc.co.uk/news/business-15063827 [Accessed: 2nd April 2012]

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BBC (2012a) David Cameron won't rule out women in boardrooms quotas. Available at:

http://www.bbc.co.uk/news/uk-politics-16958852 [Accessed: 2nd April 2012]

BBC (2012b) EU considers laws to put women into top jobs. Available at:

http://www.bbc.co.uk/news/world-europe-17257676 [Accessed: 2nd April 2012]

BBC (2012c) BAE Systems's annual sales fall by 14%. Available at:

http://www.bbc.co.uk/news/business-17054577 [Accessed: 2nd April 2012]

City AM (2012) Cable: quotas for women on boards not needed in UK. Available at:

http://www.cityam.com/latest-news/cable-quotas-women-boards-not-needed-uk [Accessed: 2nd April

2012]

Equal Opportunities (2011) BAE Systems: challenging gender stereotypes. Available at:

http://www.eortrial.co.uk/default.aspx?id=1153854 [Accessed: 2nd April 2012]

Electrical Times (2012) New EAL qualification supports female industry workers. Available at:

http://www.electricaltimes.co.uk/news/article.asp?articleid=6114 [Accessed: 2nd April 2012]

Global Security (2006) F-35 Joint Strike Fighter (JSF) BAE Systems. Available at:

http://www.globalsecurity.org/military/systems/aircraft/f-35-bae.htm [Accessed: 2nd April 2012]

Opportunity Now (2012) The Santander Award - BAE Systems. Available at:

http://www.bitcdiversity.org.uk/awards/on_awards_2011/on_awards_case_studies_2011/santander/

bae_systems.html [Accessed: 2nd April 2012]

Professional Engineering (2012) IMechE accelerates drive to get more women into engineering.

Available at: http://profeng.com/news/imeche-accelerates-drive-to-get-more-women-into-engineering

[Accessed: 2nd April 2012]

Process and Control Today (2011) Semta supports women in science, engineering and manufacturing

industries in the North West with launch of new programme. Available at:

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Sweden (2012) Gender equality: The Swedish approach to fairness. Available at:

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April 2012]

Where to Work (2009) BAE Systems wins prestigious women's award. Available at:

http://www.wherewomenwanttowork.com/news/news.asp?id=1370&articleid=934 [Accessed: 2nd

April 2012]

Where to Work (2010) BAE Systems wins prestigious women’s award. Available at:

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