A European Union-wide consultation on whether to introduce mandatory quotas to try and increase the number of women on company boards has been branded a “mistake” by the coalition government’s boardroom diversity champion.
Lord Davies of Abersoch admitted that the move by the EU’s Justice Commissioner, Viviane Reding, “raises the temperature” on organisations that have so far failed to recruit more women directors, but told the Financial Times that he believed self-regulation was the still “the right way”.
“[Reding’s decision] doesn’t surprise me, but clearly we would be disappointed [if quotas were introduced], he said.
Lord Davies published a government-backed report last year, which set targets for FTSE 100 companies to have a minimum of 25% of female board members by 2015. He stopped short of introducing a mandate, however.
An official report update next week by the Cranfield School of Management is expected to show that the overall percentage of women in the FTSE 100 boardroom has risen from 12.5% to nearly 15% over the last year.
But the number of female executive directors has fallen slightly to 6.1%, while the number working for FTSE 250 companies came in at a mere 4.4%.
Very disappointed
This situation has led some equality campaigners to fear that organisations have simply increased the level of female non-executive appointments that they make in order to ensure that they are seen to hit Lord Davies’ targets, while still dragging their feet on recruiting women to top management positions.
But in an interview on Bloomberg TV, the EU’s Justice chief, Viviane Reding, said that she was “very disappointed” about the “limited progress” that European organisations had made so far on redressing the gender imbalance.
“I am not a great fan of quotas. However, I like the results they bring,” she said, adding that the lack of women in top business jobs “harms Europe’s competitiveness and hampers economic growth”.
Reding said that the aim of the consultation was to ask business and other groups to comment on the kind of measures that the EU should be taking in order to tackle the problem.
Spain has already set itself a target of 40% female representation among large companies by 2015, while France passed legislation last year to impose a 20% quota by 2014, rising to 40% by 2017, on firms with at least 500 employees and generating annual revenues of E50 million.
UK prime minister David Cameron also warned last month that companies may face quotas if they do not pull their socks up.
But Neil Carberry, the CBI’s director for employment warned: “The UK government must continue to make clear its opposition to quotas and promote the voluntary approach that is starting to bear fruit as businesses set targets and take actions to improve the flow of female leaders to the top.”
