In his report, Lord Davies has praised the voluntary approach taken by quoted UK companies, with the initial target of 25% representation by 2015 having nearly been attained. Women’s representation on FTSE 100 boards is now 20.7% – a vast improvement from the mere 12.5% in 2011; women represent 15.6% of the boards of FTSE 250 companies in comparison with just 7.8% in 2011; and, fewer than 50 women need to be appointed to FTSE 100 boards in the next 18 months for us to reach our 25% target.
These figures reflect a change in the attitudes and culture of British businesses, the advantages of diversity and attracting a wider pool of talent are becoming clear. However, the following are some of the recommendations Lord Davies put forward in order for us to reach, and hopefully surpass, the target.
- Stretched targets – companies should increase their targets to beyond 25% representation; 25% should be a target, but not a limit.
- Transparency and meaningful disclosure – FTSE 350 companies should provide meaningful disclosures on gender diversity in their annual reports and on their websites. They should disclose both how much progress has been made at board and senior management levels, and what their policies and principles for future development are.
- Specific targeting – there are now only two FTSE 100 and 48 FTSE 200 companies with all-male boards; these companies should take specific action to diversify their boards.
- Best practice – the FTSE 350 companies whose boards are not 25% female should look to the practices of their peers to achieve similar success.
- Nominations processes – at least one female non-executive director should sit on the Nominations Committee of each FTSE 350 company. When it comes to appointing new board members and re-electing non-executive directors, gender balance should be a core consideration.
- Executive search firms – these should provide meaningful disclosures relating to the recruitment process, including figures showing the proportion of women on long and short lists. FTSE 350 clients should appoint executive search firms that adhere to the Voluntary Code of Conduct.
- Investors – their influence should be used to encourage positive change. Investors should adopt a clear voting policy for companies that do not set boardroom policies to increase gender diversity; they should aim to vote against the re-election of chairmen and members of the Nominations Committees that have not acted to counter all-male boards; and they should actively encourage the appointment of woman to the Nominations Committee.
- Shortlist targets – FTSE 350 companies and executive search firms should aim for there to be at least one female on the shortlist of all searches, ensuring that companies see a diverse mix of candidates for all board positions.
Keeping on track
More women are now climbing to the top of the business pyramid, more accurately representing the working population of the UK and diversifying the population of UK businesses. Lord Davies was very positive that the 25% target would be met. Let’s hope that our voluntary approach proves worthy and that we can aim for true gender parity in the business world in the not-too-distant future.
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