Lord Davies has delivered his independent review into Women on Boards.
You can Download the Davies Review – Women on Boards Report here…
The report recommends that UK listed companies in the FTSE 100 should aim for a minimum of 25% female board member representation by 2015. FTSE 350 companies should set up their own, challenging targets.
The report says that companies should set targets for 2013 and 2015 to ensure that more talented and gifted women can get into the top jobs in companies across the UK. Lord Davies also calls on chairmen to announce these goals in the next six months and Chief Executives to review the percentage of women they aim to have on their Executive Committees in 2013 and 2015.
As part of the report Lord Davies and his panel state that companies should fully disclose the number of women sitting on their boards and working in their organisations as a whole, to drive up the numbers of women with top jobs in business.
- Investors should pay close attention to the recommendations from the report when considering re-appointments to a company board.
- Companies should periodically advertise non-executive board positions to encourage greater diversity in applications.
- 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 to 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 the progress made.
Reactions to the Report
Financial Reporting Council Chairman Baroness Hogg said:
“The FRC believes that diversity at the board table can help to make boards more effective, for example by reducing the risk of ‘group think’. The change we made to the Code last year has helped to trigger a significant change in attitude to the persistent failure of companies to appoint more women to boards, depriving themselves of the benefits of the full talent pool available to them.”
“However, as Lord Davies says, progress remains slow, and so we will consult on whether to make further changes to the Code.”
Stephen Alambritis, Commissioner at the Equality and Human Rights Commission, said:
“At the current rate of change it will take 73 years for women to achieve equal representation on the boards of FTSE 100 companies. We need to speed up progress. This is not just a moral issue. Our businesses are paying a penalty; there is evidence that more diverse boards take better and more responsible decisions.
“Clearly, we agree with Lord Davies that business needs to put its house in order. We also agree that it would be better for companies to take action themselves without government having to impose quotas upon them. We do, however, need them to demonstrate real progress on this issue – and not just in relation to women but in terms of diversity of all kinds.
“The Commission will make this a priority for our investigations over the next two years. We hope that our work will show that companies are really taking action.”