PM welcomes progress on women on boards, but says there is still a long way to go
More businesses challenged to set out their plans to increase female representation at senior levels. External site: [Read the Women on Boards review on the Department for Business, Innovation & Skills website](http://www.bis.gov.uk/policies/business-law/corporate-governance/women-on-boards) External site: [WATCH: video of PM at the Downing St Women on Boards event](http://www.youtube.com/watch?v=X7Ac0d6gvo0&feature=player_embedded) Download: [Download the FTSE 100 and 250 Targets for Women on Boards](http://www.number10.gov.uk/wp-content/uploads/2011/10/Women-on-Boards-Targets-tables.xlsx) Download: [Read Prime Minister's letter regarding women on boards](http://www.number10.gov.uk/wp-content/uploads/2011/10/dsmfd21@no10-x-gsi-gov-uk_20111014_164128.pdf)
The Prime Minister today welcomed the steps forward shown in the Women on Boards six month progress report, commending the companies who have pledged to increase the number of women in senior positions, and challenging more businesses to follow suit.
In his review in February, Lord Davies recommended that the FTSE 100 should be aiming for a minimum of 25% female board representation by 2015 and that the FTSE 350 should be setting their own, challenging targets. He also called on chairmen to announce their goals and said companies should disclose the number of women sitting on their boards and working in an organisation.
Today’s progress report finds that 61 of the FTSE 100 companies have responded to the Lord Davies review, acknowledging that gender diversity is an issue, with 33 setting themselves targets for the percentage of women they aim to have on their boards. The report also shows that only 21 women have been appointed to board positions out of a possible 93 - 22.5%, some way short of the 33% recommended in the Davies report.
The Government is publishing a list of the number of women on the boards of top UK companies together with their pledges, in line with Lord Davies’ recommendations.
Receiving the independent report at a No. 10 event to celebrate women’s contribution to business, the Prime Minister made clear that although progress had been made, he wanted more businesses to step up and drive this forward and that’s why he has also written to the FTSE350 companies that have still to set out their plans.
The Prime Minister said:
Earlier this year Lord Davies published his strategy to increase the number of women on the boards of listed companies in the UK.
Six months on, important steps forward have been made. But there is still a long way to go to encourage the best to rise to the top of industry, regardless of their background or gender.
Now more than ever, as we look to grow our economy and maintain a competitive edge over our international counterparts, it’s important we make the most of the talent and skills out there.
I want more to see more companies setting out their plans for women on boards and driving this forward.
The figures published today show that:
- women make up 14.2% of FTSE 100 Directors - up from 12.55 in 2010
- women make up 8.9% of FTSE 250 Directors - up from 7.8% in 2010
- 22.5% of all board appointments since publication have been female
- there are 14 all male boards within the FTSE 100 - down from 21 in 2010.
Today’s progress report follows Business Secretary, Vince Cable and Home Secretary, Theresa May asking Lord Davies to develop a strategy to increase the number of women on boards back in August 2010.
Responding to today’s report, Business Secretary Vince Cable said:
Evidence shows that diversity is as good for businesses performance as it is for women - diverse organisations reflect their customers better, understand them better and offer better products and services as a result.
It is essential that we don’t miss out on the talent and skills of half our population if Britain is going to compete in a fast-moving global economy. Lord Davies and his team have done excellent work to help businesses begin to tear down the barriers that prevent women rising to the top. I would urge all companies to set their own goal for increasing diversity on their board and look at what they can do to support the female talent in their business.
Home Secretary and Minister for Women and Equalities Theresa May added:
The business case for increasing the number of women on boards is clear. It’s about improving performance and having a board that reflects and understands its customers.
Better use of women’s skills could be worth billions of pounds to our economy each year. I am pleased with the progress reported today, but there is still a long way to go.
Increasing women’s representation at senior levels will increase diversity and help close the gender pay gap.
Today’s Downing Street event was attended by leading businesswomen and organisations that have led the way in supporting greater diversity in the boardroom, such as Helena Morrissey, Founder of the 30% Club.
Helena Morrissey, Founder of 30% Club said:
I’d like to thank the Prime Minister and Lord Davies for their wholehearted and practical support of the work towards the goal of better gender balance in Britain’s boardrooms.
The Chairmen of the UK’s top businesses who have signed up to the aspirational goal of 30% women on their boards by 2015 have done so because they have seen the impact women can make on the effectiveness of their boardrooms.
The UK has been and can continue to take the lead internationally in setting high standards of corporate governance, including ensuring boards are sufficiently diverse to bring a range of perspectives and experiences to any issue. The 30% Club is all about bringing the gender diversity issue beyond the advocacy groups and into the business community, from the periphery into the mainstream to achieve not just more women on boards but better corporate performance.
This is not a ‘special interest’ or a ‘women’s’ issue, but a business issue.
Background on Women on Boards
In August 2010 Lord Davies was tasked by Business Secretary, Vince Cable and Home Secretary, Theresa May to develop a business strategy to increase the number of women on the boards of listed companies in the UK. Following a wide consultation Lord Davies published his recommendations in February this year.
He recommended that UK listed companies in the FTSE 100 should be aiming for a minimum of 25% female board member representation by 2015. He recommended in his report for government that FTSE 350 companies should be setting their own, challenging targets.
The report also said 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 called 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.
As part of the report Lord Davies and his panel stated 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.
The report also recommended:
- 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.
- Headhunting firms should draw up a voluntary code of practice addressing gender diversity in relation to board level appointments to FTSE 350 companies.
- 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.
Today’s six month progress report was compiled by Cranfield School of Management and is a six-month progress report detailing the developments made on the recommendations.
Progress since Lord Davies published his review includes:
Executive Search Companies joining forces to develop a Voluntary Code of Conduct for head-hunters to increase numbers of female candidates put forward for board positions. This was launched in July and eleven of the top search firms have signed up to date.
http://www.mwmconsulting.com/Executive-Search-Firms-Launch-Voluntary-Code.html
The Home Secretary has launched a new framework for voluntary gender equality reporting, which has already seen sign-up from some of the UK’s leading firms. The ‘Think, Act, Report’ initiative is aimed at improving transparency on gender equality issues in the private and voluntary sector, and marks a major breakthrough for the government in encouraging more transparency on gender equality issues in the workplace.
The Financial Reporting Council has announced it will require listed companies to report annually on their boardroom diversity policy, including gender, and on any measurable objectives that the board has set for implementing the policy and the progress it had made in achieving the objectives. The FRC will also update the Code to include the diversity of the board, including gender, as one of the factors to be considered when evaluating its effectiveness.
The Department for Business has launched a consultation on narrative reporting which considers ways of achieving greater disclosure of the numbers of women at various levels within individual organisations.
For more information on Lord Davies’ Review, please contact the BIS Press Office on 020 7215 5377.
Today’s six month progress report by Cranfield University, which includes a list of the number of women on the boards of top UK companies together with their pledges, is published at this address:
http://www.bis.gov.uk/policies/business-law/corporate-governance/women-on-boards
For more information on the Cranfield School of Management progress report, please contact Marie McCormack at Cranfield School of Management on 01234 754425 or email sommediarelations@cranfield.ac.uk
Further supporters of women on boards
Getting on Board is a charitable organisation that helps people to find places on boards, such as being a trustee of a charity or a school governor.
Sarah Hodgkinson is the Chief Exec of Getting on Board, she said:
One of the key challenges for women aiming to become company directors is how to obtain the relevant experience. Volunteering as a charity trustee is an excellent way to gain this experience and develop skills which are transferable back into the workplace.
An increasing number of employers and professional associations are encouraging their employees and members to volunteer for boards of charities as part of their development. Getting on Board can help individuals find just the right opportunity for them.
Peninah Thomson of The Mentoring Foundation commented:
Mentoring helps both mentors and mentees by building professional relationships between high potential female executives and the senior decision-makers who appoint directors; and by guiding mentees in developing their careers. It increases the ‘available’ talent pool of potential female directors. More than two-thirds of the women in the FTSE100 Cross-Company Mentoring Programme have achieved significant career advancement since joining our Programme.
Kate Grussing, Managing Director Sapphire Partners, said:
Running a search firm that specialises in recruiting women for senior executive and non-executive roles, I am all too aware that there are not enough women at the top of British business, despite the great female talent in this country.
The Women on Boards review is an important step in the right direction. As a company that was founded to help companies better access female talent, we were delighted to sign up to the head hunters’ code to promote gender equality on British boards.
Christina Ioannidis, chief executive officer Aquitude, said:
The huge untapped potential of women in business is a really important issue for my business, and the UK economy as a whole.
I am delighted to be a part of events like this and to hear from the Prime Minister and Lord Davies that the Government is backing businesses that support women and wants to tackle this issue head on.
Denise Wilson, Women on Boards steering panel member and Director at Ecclesiastical Insurance Group, said:
The case for increasing the number of women in senior business roles is clear. It not only increases diversity, but is proven to improve performance and boost the economy.
That is why I’m so pleased to be on Lord Davies’ Women on Boards steering panel and I’m looking forward to building on the progress we’ve already made.
Anita Frew, Chairman of Victrex PLC, said:
It’s great to attend an event like this and celebrate the outstanding and diverse achievements of women in business. As a female Chairman, I want to inspire more women to reach the top of British businesses and I’m pleased to see the Government raising the profile of women in business.
Heather Jackson, chief executive of The Women’s Business Forum said:
It is great to see clear progress in the largest companies but we believe the pace of change has to extend rapidly to all companies. This is not a women’s issue but rather a business issue that will benefit the wider economy. A wealth of evidence exists that shows a better gender balance across a business improves performance and that’s what UK plc needs right now.
Our 4,000 members across the UK are adamant that they want to achieve career progression through meritocracy rather than by quotas. That’s why we launched our campaign to both show FTSE 350 and leading regional companies how to address this issue and to educate their women as to the value they bring to those companies. These are the companies who are the backbone to the economy and who will provide the talent pool for the next generation of board members.
Maggie Craig, Director at ABI said:
It is important that businesses take their responsibility to develop their female staff seriously. It is not only the fair thing to do, but it will boost their bottom line and help their businesses to thrive. Our members as the institutional investors have a clear interest in this happening and have recently published a report on the subject.
Lord Davis and his panel have helped to bring this issue out into the open; the important thing now is that we all work together - companies, investors and government - and continue to make progress.
Dr Ines Wichert, Senior Psychologist Kenexa High Performance Institute and author of “Where have all the senior women gone? 9 critical job assignments for women leaders” said:
It’s early days, but it’s encouraging to see a small but significant increase in women appointed to the Board since Lord Davies published his first report. The Government’s public support of this issue can only have helped spur many organisations to take positive action. Whilst target setting at the top is important there are a number of other issues that will help support diversity on boards and throughout organisations as whole. Career planning, from the bottom up, and giving women the right opportunities to develop the skills and gain the experiences they need is crucial if we are to build a critical mass of women with the right career experience to serve on Boards.
My research has shown there are nine critical job assignments that women should have accumulated on their CVs if they are to be serious contenders for a board position. If organisations want access to the best candidates for senior roles, they need to ensure these critical job assignments are available to women at the right time in their careers, set against the realities of juggling work with motherhood.