What do we already know?
In our March 2011 Newsletter we reported the publication of Lord Davies’ independent review of women on boards. This ‘Davies Report’ identified four key business reasons why companies must take the issue of having a diverse board seriously and made a number of recommendations to address the imbalance of women on boards. Since the Davies Report there have been annual progress reports making further recommendations.
On 29 October 2015, Lord Davies published his final report (available here) on improving the gender balance on British boards. The report shows that women’s representation in the FTSE 100 has more than doubled, exceeding the 2011 target of 25% in less than five years. There are more women on FTSE 350 boards than ever before and there has been a dramatic reduction in the number of all-male boards.
Most impressive is that the UK has emerged as a leader and role model on the international stage for having made such good progress under an entirely voluntary regime: it’s sixth in Europe behind Norway, Sweden, France, Finland and Belgium (many of whom have introduced quota regimes). The UK has also recently endorsed “name blind” recruitment to tackle unconscious bias.
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 UK has done well without introducing quotas and 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.
- 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.
However, there is still much work to be done and recommendations going forward include:
- That the voluntary, business-led approach to improving female board representation be continued for another five years.
- Work needs to be done to increase the number of women holding executive positions (currently 9.6% within the FTSE 100).
- Setting a target for female board representation in the FTSE 350 of 33% within five years.
- That FTSE 350 companies extend work on gender balance to their executive committees and in the most senior leadership positions.
- Establishing a new steering group which will review the above recommendations and, after consultation, publish more detailed comments at the start of 2016.