Women’s representation in the corporate boardrooms

Six months after Lord Davies concluded his review of women’s representation in the corporate boardrooms of Britain’s biggest companies, progress appears to be mixed.
The positive news is that figures suggest women are being appointed to the boards of FTSE 100 firms at double the rate seen in any previous year. The bad news is that many companies outside the ‘blue-chip’ index do not seem to be embracing the change and the pace is still too slow to meet the report’s target of 25 per cent female representation on the board of every FTSE 350 company by 2015.
Lord Davies held back from recommending the imposition of quotas, but that threat hangs in the air. Most of us naturally feel that legal compulsion can be a hammer to crack a nut, but in this case the issue is massive not just from an equality or diversity perspective but also when considering the UK’s future economic competitiveness.
The talent argument is spurious – there are plenty of talented and bright women working across the full range of industries. While it is true that fewer women have boardroom experience, this is a result of underrepresentation and can easily be addressed through formal inductions, similar to the training given to new pension fund trustees to alert them to their responsibilities.
The lack of women goes to the culture at the heart of the boardroom. Unlike in many other countries where boardroom diversity is seen as strengthening the company, in the UK it still seems too many companies prefer to recruit ‘one of their own’.
The pressure is on, not just from Lord Davies but from high profile networks such as the 30% Club who are asking company chairs directly to take personal responsibility including briefing head hunters to find suitable women candidates. Shareholders are also being recruited to put pressure on to boards to promote gender equality in their companies.
We should not let the progress we can see blind us to the lack of progress elsewhere. Lord Davies was hoping for companies to embrace the change and announce clear targets they are working towards. So far those that have done appear to be the exceptions.
Unless the slow burn we have seen so far starts to spark more brightly, we seem to be heading towards legally enforced quotas. It sounds drastic, but they have been shown to work very effectively in other countries such as Norway. My view is that quotas will deliver the short sharp shock needed to change corporate culture and then will become redundant as dinosaur directors who have been clinging to the status quo finally realise what they’ve been missing.