Former UK government minister Lord Davies has called on FTSE 350 companies to increase the percentage of women at the board table to 25% by 2015. But he stopped short of imposing quotas, unless voluntary measures fail. The ‘Report on Women in Business’ includes some of the following recommendations:
- All heads of FTSE 350 companies should set out the percentage of women they aim to have on their boards in 2013 and 2015.
- FTSE 100 boards should aim for a minimum of 25% female representation by 2015.
- Each year, quoted companies should be required to disclose the proportion of women on the board, women in senior executive positions and female employees in the whole organisation.
- Company bosses should disclose meaningful information about their firms’ appointment processes and how they address diversity in annual reports.
- Recruitment firms should draw up a voluntary code of conduct addressing gender diversity and best practice covering FTSE 350 board level appointments.
Other measures put forward include a call for more women to be promoted to executive committees to ensure there is a more diverse talent pool for companies to recruit female non-executive directors from.
Helena Morrissey, 30% Club founder and chief executive officer (CEO) of Newton Investment Management, warmly welcome Lord Davies’ recommendations and said she believed they will add to the significant momentum already building towards achieving a higher representation of women on UK boards and, as importantly, the development of women’s careers generally. “I believe he has struck the right balance by calling for decisive and measurable action without resorting to a quota. A quota at the board level might be a ‘quick fix’ but would create only the illusion of change. A quota actually undermines the principle of equality, is condescending and makes no economic sense.
“We are much more likely to achieve gender equality in the boardroom if we allow businesses to diversify their boards voluntarily and organically. One of the key aims of the 30% Club is to inspire debate and get business leaders thinking about the crucial and positive role that women have on boards. As more women join boards, the more they can demonstrate that they can add real value to an organization – not only in terms of bringing a new perspective to the table, but also in terms of boosting a company’s bottom line. This is backed up by extensive research, including a report from Cranfield University, which showed that companies with women leaders tended to have a higher return on equity.
“For the first time, quoted companies will be required to set out the proportion of women they aim to have on their boards in 2013 and 2015. And perhaps more importantly they will be required to disclose every year exactly how many women they have in senior positions and to indicate what steps they are taking to achieve better gender balance at senior levels.
“We know that these recommendations aren’t going to change the make-up of boardrooms overnight, but they represent a huge step towards equality for all women,” she concluded.
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