Chairmen of FTSE 350 companies are expected to announce their goals for increasing the proportion of women in the boardrooms by September.
This is one of the recommendations made by former trade minister Lord Mervyn Davies of Abersoch in his independent review, Women on Boards, which was published today. It follows a recent study by the Institute of Leadership & Management, which found that 73 percent of female managers believe there is still a glass ceiling.
Nearly three-quarters (73 percent) of female managers believe that there is still a glass ceiling, according to new research from the Institute of Leadership & Management (IL&M).
“Currently 18 FTSE 100 companies have no female directors at all and nearly half of all FTSE 250 companies do not have a woman in the boardroom. Radical change is needed in the mindset of the business community if we are to implement the scale of change that is needed.
“This is not about aiming for a specific figure and is not just about promoting equal opoortunities but it is about improving business performance. There is growing evidence to show that diverse boards are better boards, delivering financial out-performance and stock market growth,” Lord Davies said.
The proportion of women on FTSE 100 boards has increased from 9.4 percent in 2004 to 12.5 percent of 2010, but Davies said that the rate of increase was “too slow”. This was supported by findings in the Equality and Human Rights Commission report in 2008 which said that at the current rate of change, it would take more than 70 years to achieve a gender balance in the boardrooms in the UK’s largest 100 companies.
A report from the Cranfield School of Management, ‘Female FTSE Report, 2009’, also found that only 12.2 percent of directors of FTSE 100 companies in 2009 were women, a number which fell further among FTSE 250 companies, where the proportion was just 7.3 percent.
In order to address this, the report has stopped short of imposing statutory quotas – a widely-opposed measure internationally and only 11 percent of the 2,654 responses to the consultation recommended quotas – and instead recommended targets for corporate boards to work towards.
“All chairmen of FTSE 350 companies should set out the percentage of women they aim to have on their boards in 2013 and 2015,” the report states.
“FTSE 100 boards should aim for a minimum of 25 percent female representation by 2015 and we expect that many will achieve a higher figure.”
As well as expecting all chairmen to announce their goals within the next six months, Davies expects all chief executives to review the proportion of women they aim to have on their executive committees in 2013 and 2015.
Furthermore, he recommended quoted companies to be required to disclose every year the proportion of women on the board, in senior executive positions and female employees in the whole organisation.
Maggie Berry, managing director of womenintechnology.co.uk, backed the report’s recommendations.
“Action needs to be taken to speed up the progression of women in the workplace.
“I believe organisations need to set targets related to gender diversity, as opposed to quotas which have more negative connotations linked to positive discrimination. Introducing quotas would not be a popular move among many women who would instead rather achieve based on their ability and merit,” she said.
The IT industry body Intellect, which runs a Women in IT Forum, said that the Davies report is a positive step towards recognising female talent in businesses.
"Greater participation of women in boardrooms is necessary and the way to do this is to increase the number of senior female executives from which board members can be drawn," said Carrie Hartnell, associate director of Intellect's Women in IT Forum.
"There is a business case, not just an equality case, for diverse boardrooms, which is even more important in a period when the need for private sector growth is paramount. Intellect and its Women in IT Forum will continue to work in an open and collaborative manner to inspire the cultural change required for achieving the targets set in Lord Davies' report."