The government has said a third of all board seats at Britain's biggest companies should be held by women by 2020, raising its bar of 25 per cent by 2015. It also expanded the target for board seats, currently limited to the FTSE 100, to take in the country’s next 250 biggest companies. The move follows Lord Mervyn Davies' review on improving the gender balance in Britain's top companies.
An optimistic Davies said, “There is going to be a transformation in the landscape of UK corporate. I genuinely do believe that.” Pointing out the changing social attitudes among younger people, who expect to work for companies that “have equality in every way, shape or form” and great acceptance among company leaders that diversity is a business issue. “This is a social change. It started at the boardroom, now it is going to move to executive and pipeline, and at the same time we are going to have a real exposure where there is inequality on pay,” he said. However, even when the government-backed committee has increased and widened its targets to one in three female directors on FTSE 350 boards, the progress still remains slow for many campaigners. Only two companies in the FTSE 100; InterContinental Hotels and Unilever, have boards evenly split between the genders. There are just three female FTSE 10 chairpersons, and five chief executives. Vince Cable, former Liberal Democrat business secretary, and Chuka Umunna, former shadow business secretary, have issued a joint call for Lord Davies to report on the progress into the ethnic diversity of boards.
Both of them said there were only four non-white chief executives in the FTSE 100 companies, against 14 per cent of the wider population. “We cannot carry on like this. It sends a terrible message to young Britons of ethnic minority heritage,” they said. Umunna addressed the House of Commons saying the lack of ethnic balance on boards was rather “appalling”. Anthea Simmons, chair of Board Apprentice UK, said that while “culture, connections and confidence” are barriers to women and ethnic minority candidates breaking on to boards, “competence and commitment are not.” Data retrieved by KPMG for the 30% Club has revealed that men were 4.5 times more likely to hold jobs that directly reported to the board, than women. Head of the 30% Club, Brenda Trenowden said she welcomed the move to bring more FTSE companies within its remit, but said she would like representation targets to “apply to all listed companies”. Its latest campaign will also include a “meaningful” specific target for female representation at the executive committee level.
Dianah Worman, diversity adviser to the CIPD, said a “more rigorous focus” on executives was “absolutely critical” because they were far more visible figures inside companies. “Steady-as-you-go works, but you need to have a long term vision as well.”
Now chair of private equity firm Corsair Capital, Lord Davies brushes away the common complaint that not enough suitably qualified female candidates are available, saying, “the talent was there for the boards, the talent is there for the executive pipeline.” He said it was now time for someone who “looks at it with a fresh pair of eyes.” “I am never going to stop talking about this issue; it has had a profound impact on me.”
