The report says that companies should set targets for 2013 and 2015 to ensure that more talented and gifted women can get into the top jobs in companies across the UK. Lord Davies also calls on chairmen to announce these goals in the next six months and Chief Executives to review the percentage of women they aim to have on their Executive Committees in 2013 and 2015.
Lord Davies was asked by Business Secretary Vince Cable and Minister for Women Theresa May in August last year to carry out a review into the barriers to increasing the number of women on the boards of UK companies. Lord Davies and his review panel received more than 2,600 responses to the call for evidence which closed in December 2010.
As part of the report Lord Davies and his panel state that companies should fully disclose the number of women sitting on their boards and working in their organisations as a whole, to drive up the numbers of women with top jobs in business.
Lord Davies of Abersoch, said:
“Over the past 25 years the number of women in full-time employment has increased by more than a third and there have been many steps towards gender equality in the workplace, with flexible working and the Equal Pay Act, however, there is still a long way to go. Currently 18 FTSE 100 companies have no female directors at all and nearly half of all FTSE 250 companies do not have a woman in the boardroom. Radical change is needed in the mindset of the business community if we are to implement the scale of change that is needed.
“This is not about aiming for a specific figure and is not just about promoting equal opportunities but it is about improving business performance. There is growing evidence to show that diverse boards are better boards, delivering financial out-performance and stock market growth.
“I have been pleased to see the huge amount of interest that this review has sparked both from individual businesses and industry groups. I hope that the recommendations I am announcing today will mark the beginning of a step-change so that more of our talented women get seats on our top boards.”
The report also calls upon The Financial Reporting Council to amend the UK Corporate Governance Code to require listed companies to establish a policy concerning boardroom diversity. This should include how they would implement such a policy, and disclose annually a summary the progress made.
In his report Lord Davies also recommends:
- Investors should pay close attention to the recommendations from the report when considering re-appointments to a company board;
- Companies should periodically advertise non-executive board positions to encourage greater diversity in applications;
- And headhunting firms should draw up a voluntary code of practice addressing gender diversity in relation to board level appointments to FTSE 350 companies.
Research from Cranfield University has highlighted a lack of female directors in Britain’s top businesses, with women making up only 12.5% of directors if the FTSE 100 companies in 2010. The FTSE 250 companies have even lower proportion of female directors at 7.8%, and nearly half of them do not have any women in the boardroom.
Notes to Editors
1. Lord Davies report, ‘Women on Boards’ and the panels recommendations can be seen here: http://www.bis.gov.uk/news/topstories/2011/Feb/women-on-boards
2. The Women on Boards steering group membership:
- Lord Davies
- Susan Vinnicombe, Cranfield
- Amanda MacKenzie, Aviva,
- Dominic Casserley, McKinsey & Co
- John Parker, National Grid
- Annouska Ducas, Annouska,
- Sally Bott, BP
3. Lord Davies was commissioned by Government on the 6th of August 2010 to develop a business strategy to increase the number of women on the boards of listed companies in the UK.
4. The call for evidence as part of Lord Davies review of the lack of women on British boards closed on Tuesday 30th November 2010, after receiving more than 2,600 responses.
5. BIS' online newsroom contains the latest press notices, speeches, as well as video and images for download. It also features an up to date list of BIS press office contacts. See http://www.bis.gov.uk/newsroom for more information.
TERMS OF REFERENCE FOR MERVYN DAVIES REVIEW
To consider options for promoting gender equality on the Boards of listed companies. In doing so to consider the obstacles to women becoming directors of listed company boards including looking at existing research about women on listed company boards and recent developments in international practice and to make proposals on what action should be taken to improve the position.
It should involve interested parties including Board members, executive search firms, investors and other interested parties in considering proposals for change.
The business strategy will be presented jointly to the Secretary of State for Business, Innovation and Skills and the Minister for Women and Equalities. The business strategy should deliver a set of recommendations with supporting material outlining the thinking behind the recommendations and the views of key interested parties.