When Lord Davies of Abersoch published his review of the representation of women in UK boardrooms back in February 2011, he issued a challenge to business.
The former trade minister and chairman of Standard Chartered recommended that FTSE-100 companies should aim to increase the proportion of board posts filled by women to a minimum of 25 per cent by 2015 and that FTSE-350 chairmen should publish targets for female representation on their boards in 2013 and 2015. He avoided setting quotas but warned that the government should consider legislation if firms failed to act.
So, two years on, are Britain’s boards making the voluntary approach to equality work? Cranfield School of Management’s “The female FTSE report”, which reviews female representation in FTSE companies twice a year, suggests that they are. In December 2012 women accounted for 17.4 per cent of FTSE-100 boardroom roles, up from 12.5 per cent in December 2010, and 26 companies had already achieved Davies’ 25 per cent target. In the next tier down, the FTSE 250, 12 per cent of board positions were filled by women, up from 7.8 per cent.
In the second half of 2012, the percentage of appointments going to women in both the FTSE 100 and the FTSE 250 rose to 44.1 per cent and 36.4 per cent respectively. Susan Vinnicombe, director of the International Centre for Women Leaders at Cranfield, and co-author of its research on women on boards, observes that this trend means that the FTSE 100 are on track to hit their 2015 target. “All you can really change is new appointments. So, if the momentum continues, we’ll make it,” she says.
There are only seven all-male boards left in the FTSE 100, all in natural resources and mining: Antofagasta, Croda, Glencore, Xstrata, Kazakhmys, Melrose and Vedanta. There were 21 when the Davies report was published. Last year also saw the election of the TUC’s first female general secretary, Frances O’Grady.
In December the business secretary, Vince Cable, wrote to the bosses of the eight companies to remind them of their obligations. “The majority of business leaders I meet recognise the economic case for gender balance and are actively working with us to increase the number of women on their boards,” he said at the time. “But we must also challenge the paternalistic culture and silent assumptions about women’s priorities that are keeping the glass ceiling in place.”
In an exclusive interview with Business Voice, Davies himself welcomed the progress that has been made (see page five of this article). “I’ve always said that if we do not achieve the 25 per cent target, or if we don’t see a massive change, then we do need quotas. But I don’t think they’re necessary right now. The market has got the message and is changing itself.”
But, with the European Commission looking to impose legislation if businesses fail to improve female representation themselves, there’s still much to do, while some people feel that tokenism may still be at play. For example, while the figures on boardroom representation are heading in the right direction, women are not taking up key executive positions. In the 12 months to September 2012, there was not one woman among 22 executive director appointments in the FTSE 100 (although Karen Witts was appointed as group finance director at Kingfisher in October).
There’s broad agreement that the culture in Britain’s boardrooms has advanced, with chairmen and directors taking the need for diversity more seriously and recognising its potential to improve decision-making, governance and innovation.
Baroness Bottomley is a former Conservative MP who chairs the board and CEO practice of headhunter Odgers Berndtson and is a non-executive director on several boards. She believes there has been a “total transformation” in the past two years. “Even the most reluctant, macho businessman realises that a single-sex board looks old-fashioned and is not prepared for the modern world,” she says.
Sir Roger Carr, CBI president and chairman of Centrica, is a founder member of the 30% Club, a group of chairmen committed to bringing more women on to UK corporate boards. He’s also heartened by the progress achieved on this issue in 2012, particularly at non-executive level, and by the level of engagement in boardrooms. “The entry ticket is unquestionably merit, but gender remains added value,” he says.
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