There has been an increase in female representation on the board of directors of listed companies in the UK over the past two years according to a recent report issued by Lord Davies for the Department for Business, Innovation and Skills. However, the report suggests that there is much still to do in order to achieve a gender balance on the boards of listed companies.
Lord Davies’ Report On Women On Boards – February 2011
The Lord Davies’ report entitled ‘Women on Boards’ in February 2011 emphasised the low numbers of women at board level and questioned the reasons behind this, particularly as women make up over half of the UK population and continually out-perform their male counterparts academically.
Lord Davies’ 2011 report recommended a voluntary strategy in order to implement a culture change within organisations.
The Improvements Since 2011
Lord Davies has highlighted the following improvements:
Women now account for 17.3%of FTSE 100 and 13.2% of FTSE 250 board directors (as at 1 March 2013), up from 12.5% and 7.8% respectively since February 2011;
Women have secured 34% of all FTSE 100, and 36% of FTSE 250 board appointments since 1 March 2012;
Targets For Listed Boards
Whilst boards have increased their female representations, Lord Davies has now suggested that FTSE 250 companies in particular, should aim to have one female member on their boards for every three male members appointed.
Lord Davies has also recommended that FTSE 350 chief executives confirm the percentage of women they aim to have on their executive committees, including senior management level, within their organisations by 2015. Furthermore, Lord Davies suggested that those who have not confirmed their targets as of yet should do so by September 2013.
Women currently hold 21.8% of FTSE 100 non-executive directorships (up from 15.6% in 2010) and 6.1% of executive directorships (up from 5.5% in 2010). In the FTSE 250, women hold 16.4% of non-executive and 5.4% of executive directorships.
Numerically, this equates to 18 female FTSE 100 executive directors compared to 292 males and 32 female FTSE 250 executive directors compared to 558 male directors.
EC Launches Directive
In April 2011, the EU Justice Commissioner and Vice-President, Viviane Reding, launched “Women on the Board Pledge for Europe” which encouraged companies to commit to raising female representation on their boards to 30% by 2015 and 40% by 2020.
However, after a poor response to these guidelines, the EC published a draft directive in November 2012 setting out responsibilities for companies with the aim of ensuring that at least 40%of the non-executive directors of companies listed on stock exchanges are female by 2020, with listed companies controlled by the public sector reaching that target by 2018.