A report in this weekend’s FT suggested that the UK government-sponsored inquiry into board diversity led by Lord Davies of Abersoch will stop short of imposing quotas for FTSE companies. Instead, the report says, boards may be given a two-year timeframe in which to meet a common minimum target – expected to be between 15 per cent and 30 per cent – to speed up the inclusion of more women on the boards of the UK’s largest companies.
Both the CBI, the employers’ group, and the Institute of Directors have been outspoken in their opposition to any common-to-all, compulsory targets. The CBI suggested that progress should reflect individual companies’ circumstances:
“For example, a media company with a high number of female staff may set a higher target for the number of women on boards, compared with an engineering firm with just a handful of female employees.”
The Institute of Directors is opposed to any imposition whatsoever:
“There are no shortcuts to greater gender diversity in the boardroom. As in other areas of corporate governance, the government should focus on long-term solutions rather than measures – such as board quotas or targets – that merely mask the symptoms of the problem.”
Lord Davies, who is due to report in two weeks’ time, has already disputed some of the arguments against legislative pressure to deliver more diversity. One objection has been the lack of suitably qualified women; another that women will rise to the top by their own efforts without the need for externally imposed targets.
But progress has been too little and too slow. The proportion of women on FTSE 250 company boards is just 7.8 per cent, and more than half of FTSE 250 companies have no women at the top.
In the past few weeks, Michel Barnier, the European Commissioner of Internal Markets, told the Süddeutsche Zeitung, a German national newspaper:
“I am open to the idea of introducing Europe-wide quotas for women – for example, in the boardrooms of publicly traded companies.”
Ursula von der Leyen, co-author of a recent study by the German Institute of Economic Research, has been dismissive of the effectiveness of Germany’s voluntary agreement to increase the number of women on German company boards. She told Der Spiegel magazine:
“The agreement has been an abysmal failure. Almost nothing has changed for women.”
While the UK is unlikely to go as far as Norway or Spain in its demands on listed company boards, there would appear to be consensus building throughout Europe that a degree of push is needed to ensure at least a minimum ratio of women on executive boards.