The CBI has called for all publicly listed companies to set targets for boosting the number of women on their boards and to report progress on a ‘comply or explain’ basis.
The move comes only weeks after the heads of some of the UK’s largest companies set up ‘The 30% Club’ in a bid to increase the proportion of females at board level. The founding members of the initiative set the “aspirational” target of boosting female representation to 30% by 2015. They have not established planned quotas and do not intend to introduce women-only shortlists, however.
In the CBI’s submission to Lord Davies of Abersoch’s review for the coalition government on the lack of female directors in UK board rooms, meanwhile, it said firms that failed to meet internally set targets based on the existing number of female staff they employed should have to explain why, but not face any penalties if they did not deliver.
The UK Corporate Governance Code should likewise be revised to reflect the new requirements, the employers’ lobby group said. A similar scheme, which is due to be introduced in Australia next year, had already produced results, it added. The latest figures from the Australian Securities Council showed that 27% of new appointments in the first half of this year were female compared with only 5% last year.
Helen Alexander, the CBI’s president, said: “Boardrooms should harness the talents of the many, not just the few. Although women make up half of the population and more than half of university graduates, they remain woefully under-represented at board level.”
More must be done to ensure women moved into top jobs, but while schemes such as flexible working, mentoring and networking had helped, more sophisticated talent management was required, she added.
“What is needed is cultural change, not quotas, ratios or tokenism. That is why we are calling for a flexible system that will allow firms to set targets that reflect the realities of their businesses,” Alexander said.
Gender diversity was important as a wide range of views promoted good governance, acted as a catalyst for innovation and creativity and helped to attract more women to work for the company. But the declining number of directorships at board level had further reduced opportunities for women, she argued.
As a result, the CBI also recommended that the chairman be called upon to shape human resources policy and ensure it supported diversity, to mentor and advocate female board candidates and encourage women to take up external non-executive directorship roles.
The process behind board level appointments should likewise be made more transparent and active talent management made more of a priority, the group added.