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Cath Everett

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FTSE 100 need to diversify boardrooms or face quotas


A government inquiry is expected to recommend that FTSE 100 companies be given two years to radically increase the number of women in boardrooms or face the imposition of quotas.

The review by Lord Davies of Abersoch, ex-trade minister and former chairman of bank Standard Chartered, is likely to reject the immediate introduction of statutory quotas but could propose an across-the-board target of between 15% and 30%.
Members of the steering committee, which Davies heads, are due to meet today to make their final recommendations and their report is due to be published in two week’s time. The committee was set up last summer after business secretary Vince Cable asked Davies to look at ways to promote gender equality in UK boardrooms.
Only 12.5% of women (five in total) currently have a seat on the board of FTSE 100 companies and the proportion has changed little over the last three years. The figure drops to 7.8% among FTSE 250 firms and almost half of them have no women directors at all.
The European Commission is also considering imposing mandatory quotas if a planned voluntary code is not effective. In Norway, such policies have been deemed a success after female representation on boards jumped to almost 40% from a low of 6% in 2002. Spain and France have since followed suit.
Because progress in the UK has been too slow, however, Lord Davies’ review is also expected to require that chairmen demonstrate changes to the way appointments are made. The committee is likewise considering whether to strengthen the corporate governance code, which would mean that employers have to explain their progress in boosting the number of women in their boardrooms.
Greater diversity in executive committees could also be demanded and institutional shareholders urged to push firms to act.
Also under consideration is the introduction of a best practice code for head-hunters recruiting board-level staff and the creation of an academy to train and mentor female executives. Another suggestion is forming a group of between 35 and 40 executives to advise potential appointees.

2 Responses

  1. I wouldn’t want to get a top job just to fill a Quota…. I woul

    Equality of opportunity should be about more then ensuring minimum numbers are met and forms filled in.I'm not sure a quota would really help woman acheive at this senior level in FTSE 100 companies. I do agree that if we want to change the diversity of UK  boardrooms this needs a longer term shift in organisational approaches to attraction, recruitment, development, coaching, mentorship and career planning.

    I'm in support of giving developmental support to help woman in business acheive and promoting positive role models of woman in business but I would question if a quota would help or hinder the perception of high attaining women in business? 

    To be equitable shouldn't we be encouraging all organisations to pick the best person for the job and nurture all talented staff regardless of gender, race, ethnicity, religious beliefs, sexual orientation, disability …..?  

    Amanda Heaton

  2. Can legal restrictions impact on company culture?

    Interesting one, my colleague who specialises in equality training has just put together a blog on this topic, looking at the pros and cons of a quota.

    For me this is a debate about whether we can change the cultures within traditional organisations, and just like the government released a charter the other week in an effort to reduce the number of employee tribunals, this follows the same path. It is hard to use legal power to change the culture of organisations, it really needs to be lead from the top and done because they want to make the changes for the good of their business – not because their hands are tied with legal tape.

    Karen Murphy