This article was written for Workplace Law Network
One issue highlighted by the economic crisis has been the significant underrepresentation of women in the boardrooms of the UK’s publicly quoted companies. While this is an unacceptable state of affairs, the realisation that something must be done to redress this imbalance is clearly a positive thing.
The report entitled ‘Women on boards’ published by Lord Davies in February of this year, has put the issue firmly in the spotlight, setting out a number of compelling reasons why there should be more women on boards, including:
Lord Davies made ten recommendations in the Report, ranging from amendments to the UK Corporate Governance Code, requiring listed companies to establish a boardroom diversity policy, to recommending that there should be more transparency in the recruitment process with periodic advertising for non-executive positions. Perhaps the most widely-publicised of the recommendations has been the introduction of voluntary targets for female board representation. The Report recommended that by September 2011, chairmen of all FTSE 350 companies should announce targets for the percentage of women they aim to have on their boards by 2013 and 2015. The minimum goal for 2015 for FTSE 100 companies is 25%, with one-third of all new board appointments being women. The target for FTSE 250 companies will be lower as they tend to have smaller boards; however, the one-third rule will still apply.
The publication of the Report is undoubtedly a step in the right direction, and there have been some tangible signs of progress. Recent research shows that since the introduction of the Report, the number of women hired for boardroom positions in FTSE 100 companies has doubled. The formation of the ‘30% Club’, a new organisation whose members (including a number of very influential businesswomen and men) pledge to surpass Lord Davies’ targets on a voluntary basis, has also attracted much positive press attention.
That said, there remain a number of key factors which must be addressed in order to ensure not only that more women become quoted company directors, but that they are viewed as strengthening boards rather than simply making up the numbers:
If meaningful progress can be made in these areas, there is no reason why the proposed targets for women in the boardroom cannot be reached, or ideally exceeded, with appointments based on merit, not simply on gender.
You can register online or follow us on Twitter or LinkedIn to receive our latest news, events and publications.