‘Put more women on company boards’, says report

The commission chairman, Lord Davies of Abersoch, stopped short of pushing quotas on top flight firms, but said UK-listed companies in the FTSE 100 should have a minimum of 25 per cent female board member representation by 2015.

“This is not not about aiming for a specific figure and is not just about promoting equal opportunities but it is about improving business performance,” he said.

“There is growing evidence to show that diverse boards are better boards, delivering financial out-performance and stock market growth.”

Lord Davies was asked by the Coalition Government last August to look into why so few women make it to the top in business.

In the past 25 years the number of women in full time employment has increased by more than a third, but women still make up only 12.5 per cent of FTSE 100 directors. Currently 18 FTSE 100 companies have no female directors at all and nearly half of all FTSE 250 companies do not have a woman in the boardroom.

“Saying ‘let’s leave this up to business’ isn’t working” Fawcett Society’s Preethi Sundaram

Preethi Sundaram – Policy and Campaigns Officer for the equal opportunites pressure group The Fawcett Society – told Channel 4 News that the report doesn’t go far enough.

“Under-representation of women on boards is a stark sign of inequality in our society and we were very much of the belief that quotas were necessary,” she said. “The counter argument is that quotas are demeaning but nothing else is working and the system is not meritocratic.”

She said that men were benefitting unfairly from the current system: “As it stands we have reserved places for men, 90 per cent of people on boards are men. We would like to see quotas on a time specific bases. It’s not ideal, but the drip-drip fix of saying ‘let’s leave this up to business’ is no longer working.”

The report's main recommendations
Companies should disclose the number of women sitting on boards and working in their organisations as a whole.

Investors should pay attention to the recommendations when considering re-appointments to a company board.

Headhunting firms should draw up a voluntary code of practice addressing gender diversity in relation to board level appointments to FTSE 350 companies.

The Financial Reporting Council should amend the UK Corporate Governance Code to require listed companies to establish a policy concerning boardroom diversity. This should include how they would implement such a policy, and disclose annually a summary of the progress made.

But other groups working with women disagree that quotas are the way forward. Helen Walker is acting director of gender campaign group Opportunity Now. She told Channel 4 News that the new proposals would have a real impact and were a better idea than quotas.

“Recommendations do work, they put the process of how companies recruit under a very large microscope and are a lot more sensible than quotas,” she said.

“From the work we do in business, we know quotas are not favoured by business or women. Women want to achieve success through their talents not through tokenism.

She said that the pressure was being applied in the right places – on CEOs and on recruitment consultants – not on women.

“There are a lot of talented, tenacious women out there and boards are not fishing in a big enough pool.” Opportunity Now’s Helen Walker

“I am always nervous of saying let’s fix the women. That gives the message that the fact that women aren’t on the boards due to their talents and skills. There are a lot of talented, tenacious women out there and boards are not fishing in a big enough pool.”

Last October the Government introduced a new Equality Act, bringing together nine different laws, including the Equal Pay Act. But there was criticism at the time from the Fawcett Society, who said it left out key areas effecting women, such as the gender pay audit.

Theresa May, the Home Secretary and Minister for Women and Equality, said: “Inclusive and diverse boards benefit from fresh perspectives, new ideas and broad experience. A company with a board that reflects the people it serves is better able to understand its customers and there is growing evidence that companies with more women on their boards outperform their male-dominated rivals.”

Several senior figures welcomed the report, with Roger Carr, Chariman of Centrica saying: “Aspiration rather than legislation is the correct way forward, supported by the transparent reporting of intentions, actions and achievements. It is now up to business leaders to respond to the challenge by appointing women both on merit and in recognition of the material added value that gender balance brings to the boardroom.”