Number of Female FTSE 100 Directors Doubles – But Is It Enough?

by Cleo Thompson (London), founder of The Gender Blog

This is the final in a series of articles which looks at how UK business is approaching the issue of women on boards.

Britain’s biggest companies have more than doubled the number of women they are appointing to boardroom jobs since Lord Davies, the government’s champion of female board representation, told businesses this year that within four years a quarter of senior bosses should be women.

FTSE 100 companies have recruited 23 women to their boards this year – representing about 30% of total board appointments – after Davies said they should sign up to a voluntary target of 25% board representation by 2015.

Lord Davies of Abersoch welcomed the leap in FTSE 100 board representation but said there was “a danger that the issue becomes forgotten”. He said he was working with business secretary Vince Cable and the prime minister’s office on “ways to keep the pressure up”.

In February, Davies told FTSE 350 companies to set their own “challenging targets” and called on chairmen to announce their goals within six months and for chief executives to review the percentage of women they aim to have on their executive committees in 2013 and 2015.

“We are making progress but we have to make sure all companies publish their targets in the autumn. Even though it is voluntary, I have written to every company secretary laying out what we are expecting and I am getting letters from boards saying they are going to comply.”

He added, “Post August, I intend to make sure I keep the pressure up and there is going to be a bit of naming and shaming of companies not supporting it… There will be an event in the autumn that will make the corporate sector realise the government has not forgotten,” Davies said.

Growth through diversity

Some of the businesses in support of a new gender diversity policy include those in the 30% Club, a group of FTSE 100 chairmen who have pledged to fill 30 per cent of senior roles with women. Shadow Scottish secretary Ann McKechin welcomes this development, commenting that “The business case is clear: companies with greater diversity, in particular with a greater proportion of women on their boards, produce better business results.”

The 30% Club, which launched in November 2010 and whose founders include Royal Bank of Scotland Chairman Sir Philip Hampton and Helena Morrissey of fund management firm Newton Investment Management, are clear on the need for executive support in order to challenge the status quo. They also support the Davies Review’s steer away from the imposition of quotas. Morrissey states that the Club’s belief is that:

“… as more women join boards without the imposition of quotas, the more they can demonstrate the value they can add. By the time we get to 30%, the system will be self-perpetuating.”

Their approach includes:

• Motivating and supporting Chairmen to appoint more women to their boards;
• Providing information and support for businesses trying to improve their diversity and for women seeking board appointments;
• Working with related groups such as the FTSE Cross-Company Mentoring Programme, the Professional Boards Forum and executive search firms;
• Raising the profile of the issue by stimulating debate and influencing the political agenda, by generating media coverage, running events and collating research;
• Tracking progress towards the 30% target.

Recruitment solutions

One very recent development in this arena has been the signing up of a number of executive search firms to a voluntary code of conduct, pledging to improve senior female representation on FTSE 350 boards.

The group has set seven principles on the best practice of boardroom appointments, including creating diversity goals and balancing experience with skills to extend the pool of candidates. Long lists should also be made up of 30 per cent female candidates or explain why they do not.

Lord Davies welcomed the code and said, “By implementing these principles and working with FTSE 350 chairs and boards, the headhunter community will help to bring more talented women to the top table, improving board effectiveness in the UK.”

Katja Hall, chief policy director at the Confederation of British Industry (CBI) – which has published its own proposals for boosting gender diversity in the report, Room at the Top – said that headhunters have a “crucial role to play” in getting more women into senior positions.

“Chairmen really need to drive this process and ensure they do not over emphasise existing boardroom experience and consider other transferable skills,” she said.

“We believe the best way of getting more women on boards is by allowing companies to report on internally-set targets that reflect their business, culture and sector.”