The campaign to increase the representation of women on the boards of public companies reached a significant milestone recently.
The carrot (not stick) approach in the UK
As we’ve reported previously, (Women on Boards – Signs of Improvement) the Lord Davies review in 2011 set a target of 25% female representation on the boards of quoted companies to be achieved by 2015. The Government has adopted an approach of encouraging companies to increase the gender diversity of their boards on a voluntary basis, rather than imposing set quotas. New reporting requirements in the UK Corporate Governance Code oblige quoted companies to include in their annual reports a statement of their policy on diversity, including gender. In addition, changes made to the narrative reporting regime mean those companies must also disclose details of their boards, senior management and wider workforce broken down by gender.
In his third annual review published in March 2014, Lord Davies confirmed that significant progress had already been made by the FTSE 100 towards achieving the collective target of 25% female representation. At that time, there were still two FTSE 100 companies with all male boards.
However, the recent appointment of Patrice Merrin to the board of mining and commodities firm Glencore Xstrata plc means that, for the first time in its history, the FTSE 100 no longer has any all male boards.
No time for complacency!
In the three years since the Lord Davies review, the percentage of women on the boards of FTSE 100 companies has almost doubled. With the 2015 target of 25% looking increasingly achievable, UK companies should look to stretch this, taking on board Lord Davies’ comment that 25% is a target not a limit. Companies outside the FTSE 100, where the rate of change is slower, should look at what further measures they can take to ensure that their boards more accurately reflect the working population.
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