Lord Davies sets new target of 33% women on boards by 2020
Lord Davies has published his final report on improving the gender balance on UK boards. His plea, made in 2011, that women should hold 25% of FTSE 100 board positions by 2015 has been met. However, the report finds that there is work to be done in increasing the number of women holding executive and senior leadership positions. Lord Davies has also set a new target of 33% female board representation across the FTSE 350 by 2020.
Key points of the report include that:
- At 1 October 2015, there are no male-only boards in the FTSE 100 and women hold 26.1% of board positions in those companies, compared to 12.5% in February 2011. Within the FTSE 250, women hold 19.6% of board positions, but there remain 15 male-only boards.
- While the steering group does not believe quotas are warranted, European countries with quota regimes are likely to meet their target figures in the next few years and the UK will fall behind, both in Europe and internationally, if it does not progress beyond 26% female representation.
- Work by the executive search community to develop its standard voluntary code of conduct and the enhanced code of conduct has been a key driver of progress on gender diversity in the boardroom.
- The steering group feels that the investor community as a whole has yet to gather momentum, with the results of a recent survey showing that the majority of surveyed investors believe the investor community has responded only moderately well to the drive for female board representation.
- Work needs to be done to increase the number of women holding executive positions (currently 9.6% within the FTSE 100).
- Nomination committees and search firms should cast their net beyond the corporate sector and professional services firms when searching for potential candidates for board appointments.
The report makes five recommendations to maintain and encourage greater momentum going forward:
- That the voluntary, business-led approach to improving female board representation be continued for another five years.
- Setting a target for female board representation in the FTSE 350 of 33% within five years, increasing the progression of women to the roles of chair, senior independent director and executive director, and asking all FTSE listed companies to address gender imbalance on their boards.
- That FTSE 350 companies extend work on gender balance to their executive committees and in the most senior leadership positions.
- That a new steering group be established under a new chair, comprising business and subject matter experts.
- That the new steering group should review the above recommendations and, after consultation, publish more detailed comments at the start of 2016.
Click here for Lord Davies’ final report.