A BLOG POST BY REBECCA LURY
When the Conservatives and Liberal Democrats wrote the Coalition Agreement they agreed to ‘look to promote gender equality on the boards of listed companies’.
The current situation is thus; women are under-represented on company boards in the UK. In 2010, only 12.5% of directors of FTSE 100 companies were women, and on the boards of FTSE 250 companies the proportion was just 7.8%. Progress is slow, and without action, there appears to be little chance of these figures increasing of their own accord.
Lord Davies of Abersoch, a Labour peer who has been passionate about this topic for many years was tasked with leading the review, which has been published today.
Equal representation on company boards is key; as the report tells us, evidence suggests that gender-diverse boards have a positive impact on performance. There should be equal representation on company boards; not through an arbitrary figure, but by helping women through removing the barriers that currently exist. Women deserve their place on company boards as much as men do.
The Report very much adheres to the idea of the ‘Big Society’; the Conservative Party’s tagline. Rather than Government imposed quotas, companies are being put in control; having to set out the percentage of women they aim to have on their boards in 2013 and 2015. There are also increased roles for disclosure, complementing the Corporate Governance programmes that the Coalition Government are instigating.
Alongside this is what I would deem as the most important tool to help increase the representation of women on company boards; support through mentoring, training and development. The talent pool exists, but women are not receiving the support that they need in order to get where they want to be. Through the recommendation in the report, the consolidation and improvement of the provision on training and development for potential board members should act to increase the number of women who are successful at making it to board level.
The lack of quotas and the focus on training in the review is reassuring. Whilst Europe may be considering legislation and other countries including Norway, Spain and Australia are doing so too, the UK is taking the line that quotas are not yet necessary. I do not believe that quotas will solve the problem of supporting ‘women in the pipeline’ which for me seems to be the most important in ensuring that women continually make it to the top, rather than having to be parachuted in.
How far the recommendations are adopted and enforced will have to be seen, but the Review makes some bold recommendations which, if adhered to, could significantly change the make-up of company boards going forward.