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  • 11 Jun 2021 08:52
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At the current rate of change it will take over 70 years to achieve gender-balanced boardrooms in the UK. In Europe, only chauvinist Spain manages to beat the UK on low women board member numbers, while globally China at 6.6% will probably soon overtake the UK's 7.8%. Hopefully Lord Davies urged recommendations accepted, will change quoted company annual reporting and also push a voluntary code of conduct onto executive search firms.

The Government inquiry headed by Lord Davies has been published. As expected the recommendations do not enforce a women board members 'quota', but they are sufficiently determined to appear to be trying to change the current state of affairs.

All chairmen of FTSE 350 companies should set out the percentage of women they aim to have on their boards in 2013 and 2015.  FTSE 100 boards should aim for a minimum of 25% female representation by 2015 and we expect that many will achieve a higher figure.

The UK slippage
Aspirational goals should be announce by chairmen in September 2011 and all CEOs are expected to review the percentage of women they aim to have on their Executive Committees in 2013 and 2015.

Quoted companies should be required to disclose yearly the proportion of women on the board, women in senior executive positions and female employees in the whole organisation.

The Financial Reporting Council should amend the UK Corporate Governance Code to require listed companies to establish a policy concerning boardroom diversity, including measurable objectives for implementing the policy, and disclose annually a summary of the policy and the progress made in achieving the objectives.

Companies should report on the matters in the first three recommendations in their 2012 Corporate Governance Statement, regardless of whether underlying regulatory changes are in place. Encouragement for chairmen to sign a charter supporting the recommendations will be given.

In line with the UK Corporate Governance Code provision B2.4 “A separate section of the annual report should describe the work of the nomination committee, including the process it used in relation to board appointments.”

Chairmen should disclose meaningful information about the company’s appointment process, how it addresses diversity in the annual report, including descriptions of the search and nominations process.

Investors play a critical role in engaging with company boards. So investors should pay close attention to recommendations 1-5 when considering company reports and  board appointments.

Companies are to be encouraged to periodically advertise non-executive board positions to encourage greater diversity in applications.

Executive search firms should draw up a Voluntary Code of Conduct addressing gender diversity and best practice covering the relevant search criteria and processes relating to FTSE 350 board level appointments.

To achieve these recommendations, recognition and development of two different well-qualified populations of women need consideration:  Executives in the corporate sector, for whom there are many training and mentoring opportunities; and women outside corporate mainstream, including entrepreneurs, academics, civil servants and Senior women with professional service backgrounds, for whom there are fewer opportunities to take up corporate board positions.

Entrepreneurs, existing providers and individuals need to combine  to consolidate and improve the provision of training and development for potential board members.

Finally, the steering board will meet every six months to consider progress against these measures and report annually with a progress assessment.

What impact do you feel that gender diversity in senior positions may have for business? Wordle response.


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