Tag: Institute of Directors

Liz Bolshaw

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.

Liz Bolshaw

The CBI has today announced its support for proposals to force companies in the UK to set their own internal targets for board diversity.

In its submission to Lord Davies of Abersoch’s review of the lack of women in the boardroom, the employers’ group rejected mandatory quotas, but said it would back legislation that would require companies to explain any failure to meet their gender diversity goals.

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About our bloggers

Liz Bolshaw

Liz Bolshaw is a business journalist and editor. She has been a successful book publisher, online editor, magazine editor and publisher.

She was launch editor of the Europe-wide online community Entrepreneur Country, has published magazines for PwC, 3i, dunhill and Bafta, and launched The Sharp Edge, a magazine for and about entrepreneurs, with Duncan Bannatyne. She is a regular contributor to Thomson Reuters’ Venture Capital Journal.

Her last project for the Financial Times was as editor of the paper’s Business Education magazine.

Rebecca Knight

Rebecca Knight is a freelance journalist based in Boston. She writes regularly for the FT on business education, entrepreneurship, and management.

Andrew Hill

Andrew Hill is an associate editor and the management editor of the FT. He was City editor of the FT and editor of the daily Lombard column on British business and finance from September 2006 to December 2010.

He was the FT’s financial editor from June 2005 to September 2006, with overall responsibility for coverage of companies and markets. Before becoming financial editor, he was the FT’s comment & analysis editor, in charge of the paper’s opinion and features pages.

From 1999 to 2003, he was the FT’s New York bureau chief. He joined the FT in 1988 and has also worked as foreign news editor, UK companies reporter and correspondent in Brussels and Milan.

Pino Bethencourt

Pino Bethencourt is a professor and leadership expert at IE Business School in Madrid. She is also an author and executive coach.

Lynda Gratton

Lynda Gratton is professor of management practice at London Business School.

Linda Tarr-Whelan

Linda Tarr-Whelan, former ambassador to the UN commission on the status of women, is a Demos distinguished senior fellow.