The move follows Lord Davies’ review into women in the boardroom, which recommended that UK listed companies in the FTSE 100 should be aiming for a minimum of 25% female board member representation. The FTSE 100’s proportion of female non-executive directors stands at just 12.5%.
Mark Spinner, partner at international law firm Eversheds, said
“The question of gender diversity remains a hot topic with a number of prestigious reports, including the “Women Matters 2010” report from McKinsey’s and the Eversheds Board Report* published in 2011, all confirming that greater board diversity leads to improved board effectiveness and better company performance.
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“The question of the impact board composition has on company performance was one of the issues a major international study commissioned by Eversheds, ‘The Board Report’, sought to answer. The report’s findings show that those boards with two or more female directors tended to perform better than those with fewer. There is no doubt that a diverse board brings with it a greater mix of skills and experience, and the majority of directors surveyed were in favour of more women on boards for this very reason. These findings (regarding the positive impact of a higher proportion of female directors) have raised considerable interest, particularly following the Davies Report, which looked at ways to increase the presence of female directors on boards.
“While the Davies Report ruled out setting mandatory quotas to force companies to hire female executive, the issue appears to be one of both supply and demand. The comply or explain principles promoted by the Davies Report will hopefully address the question of demand. The perhaps trickier issue to resolve is that of supply and the voluntary code of conduct for head-hunters/executive search firms (also recommended by Lord Davies) aims to try and address this. Increasing the pool of candidates beyond those already serving as a director of a FTSE 100/250 company, and ensuring that the selection criteria are fixed by reference to a broader skills set, should assist women to achieve greater success in winning board room appointments.
“Looking outside of the traditional selection pool and recognising the contribution women have made, and continue to make, in the civil service and public sector for instance, can only assist the drive to ensure greater gender diversity and challenge some of the perceived barriers. The ‘positive action’ powers under the Equality Act 2010, which came into law in April, plus equivalent European legislation, will also help supplement the existing ability of employers to create a level playing field for women throughout the workplace including at Board level although there are a number of potential (and significant) difficulties for employers seeking to rely on them.
“Many of the directors interviewed for the Eversheds Board Report acknowledged that greater diversity brought a positive dynamic to the board. Whilst the directors interviewed were in support of greater diversity as a matter of principle, the sample interviewed, like the Davies Report, stopped short of being in favour of positive discrimination or the introduction of quotas. The Board Report revealed that only 55% of directors thought that diversity for its own sake was beneficial for board and company performance and only half that number were directly in favour of taking positive action to appoint more women onto boards.”
