A UK government-backed panel has highlighted the role investors can play in boosting the number of women on company boards.
The panel, headed by former Standard Chartered Chairman Lord Davies, has recommended that FTSE100 listed companies should be aiming for a minimum of 25% female board member representation by 2015 – although it stopped short of advocating strict quotas.
But it called on the Financial Reporting Council to amend the Corporate Governance Code to require listed companies to establish a policy concerning boardroom diversity. And firms would have to periodically advertise non-executive board positions to encourage greater diversity in applications.
The Davies report says investors should pay close attention to its recommendations when considering re-appointments to a company board. “Investors play a critical role in engaging with company boards,” it states.
The review calls for full disclosure of the number of women on boards and in companies as a whole.
Lord Davies said that 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.
Business Secretary Vince Cable said: “We encourage regulators, investors and executive search firms to take forward those recommendations that fall to them.”The FRC said it would consult on whether further amendments to the Code are appropriate – it already amended the Code last year to reflect diversity on gender. The report comes as the Association of British Insurers said it would begin reporting the number of women on FTSE boards in its Institutional Voting Information Service (IVIS). The Financial Times cited analysis from headhunting firm Egon Zehnder than more than a third of non-executive appointments at FTSE 100 boards in 2011 have gone to females – which suggests firms have foreseen Davies’ recommendations.
Internationally, the debate over gender diversity at senior levels within corporates is gaining pace. In Canada, for example, the Senate Committee on Banking, Trade and Commerce is currently considering a bill that would require 50% women on boards within three years. European Union Justice Commissioner Viviane Reding has threatened quotas on Europe’s largest listed companies. And Norway has had quotas since 2006.
At the investor level, Swedish buffer fund Andra AP-fonden (AP2) has been conducting an annual study to determine the proportion of women at middle and senior at quoted companies. Helena Morrisey, chief executive of Newton Investment, discusses the issue on the BBC’s Newsnight here. Meanwhile, the United Nations’ Commission on the Status of Women group this week said the “glass ceiling” for female professionals is in fact “cast iron”.