Women on boards: To regulate or not to regulate?

A year ago, Lord Davies called on FTSE 100 companies to increase the number of women board members to 25% by 2015. With three years to go, the UK is still miles off target. But all is not yet lost, says Carmen Watson, founder of recruitment firm Pertemps.

by Carmen Watson
Last Updated: 15 Oct 2014

There is still a gender imbalance at board level on FTSE 100 firms. But progress has been made in the year since the Lord Davies Report’s publication. The percentage of female board directors of FTSE 100 companies has risen from 12.5% last year to 15% now. And 26% of new board appointments made since last March were women. Admittedly, the percentage for FTSE 250 companies is rather less: 9.4% (up from 7.8%, however), with 25% of new board appointments featuring XX chromosomes. Yes, there is still a way to go to attain gender equality across UK plc.

There has been a lot of discussion around the introduction of obligatory quotas as championed by EU Justice Commissioner Viviane Reding. Lord Davies refrained from recommending that the UK follow in the footsteps of Iceland and Norway, who already have boardroom quotas, but he did point out that the government might still decide to impose such a stricture if insufficient progress is made on a voluntary basis. This prospect was revived by David Cameron’s remarks recently.

However, a pure meritocracy would clearly be the preferable option. If there are too many artificial means of attaining this goal, it could be counterproductive and do a disservice to the many talented women already working in senior positions.  Yet those in favour of quotas may point to the fact that reaching gender balance still seems a long way off.

We will be able to make further progress provided we are able to obtain a deeper understanding of the issues and cultures within boardrooms. There is still a level of unconscious bias that takes place among decision-makers that can affect the recruitment of women to senior positions. In addition, communication should be rolled out internally through all departments to embrace the benefits of a more diverse workforce. Furthermore, buy-in on such themes should be company-wide if we are to promote a continued pipeline of female talent in the future.

Helping the cause is the growing number of reports showing that companies with diverse boards, and diverse workforces, are more successful. Add to this the fact that businesses must reflect and cater to the diversity of their customers, shareholders and other community stakeholders. These are the commercial considerations which will propel businesses to implement the changes they need to make.

It's not so hard to make diversity a priority. Just by gathering accurate and complete diversity data, companies can establish exactly where in their organisations the diversity gaps lie. From there, it takes interventions at the very top of the company hierarchy, charging the most senior executives to act as diversity champions, and tying senior rewards to the meeting of diversity targets to really make an impact. That is a slightly harder nut to crack. 

On the softer side, tailored development programmes can help, and mentoring schemes and employee networks for female staff grow female talent. The most sophisticated approaches attempt to work on unconscious bias and even the ways in which women unconsciously impede their own progress. True cultural change takes work and takes time. But companies need to show that they are on the job if they wish to avoid being forced into the shackles which legislation will ultimately impose. We have been warned...

Carmen Watson is managing director of recruitment firm Pertemps Recruitment Partnership

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