UK — Davies Report about women on boards
A report by Lord Davies, Women on Boards, has found that in 2010 women made up 12.5 per cent of the members of the boards of companies in the FTSE 100 in the UK. This was an increase from 9.4 per cent since 2004.
The report recognises that part of the challenge in addressing gender balance concerns the corporate pipeline; fewer women than men are in the upper echelons of organisations and can progress to board level.
It concluded that gender diversity on boards will only be achieved with action by chairmen and chief executives of UK companies, and support from governments and from other corporate participants including investors and executive search firms.
The report made a number of recommendations. The key ones included the following.
- By September 2011, the chairmen of FTSE 350 companies should state the share of women they aim to have on their boards by 20013 and 2015. Companies in the FTSE 100 should aim for a minimum of 25 per cent target.
- Listed companies should be required to disclose the proportion of women on boards, in senior executive positions and all staff.
- The Financial Reporting Council should amend the UK Corporate Governance Code to specify that listed companies establish a boardroom diversity policy.
- Companies should report on the above steps in their 2012 corporate governance statements.
- A separate section in companies’ annual reports should report on the nomination committee’s work, and indicate the company’s recruitment processes and how they address diversity.
- Investors should take note of the above recommendations when they consider company reports and board appointments.
- Companies should consider advertising non-executive board positions to broaden the pool of applicants.
- Executive search firms should compose a code of conduct to address diversity.
- Women who are already in senior corporate roles should be developed to take on board roles in the future, but also those who are outside the corporate sector currently; for instance, academics and civil servants.
- A combination of business leaders should convene biannually to assess progress against the above criteria and report annually.
The steps taken in the UK parallel the amendments in 2010 to the ASX Corporate Governance Council’s guidelines.
The report is available at the Department for Business Innovation and Skills website.