Lord Davies: FTSE 350 boards should be 33% female by 2020
Lord Davies’ final report includes a target for more female board members in the UK's 350 largest companies.
The recommendations made by Lord Davies in his final report, including a new target for business and a review of the female executive pipeline, was given the full support of government today (29 October 2015) as part of its determination to ensure equality for all.
Lord Davies has concluded 5 years of outstanding work on gender equality by proposing a series of recommendations including a bold new target of all FTSE 350 boards having 33% female representation by 2020 - around 350 more women in top positions.
This comes as the UK’s FTSE 100 reached a milestone of 25% of board positions being filled by women earlier this year - a target set by Lord Davies in 2011. There are more women on FTSE 350 boards than ever before, with representation of women more than doubling since 2011 - there have also been 550 new female appointments in just over 4 years.
Tackling inequality in all walks of life is at the heart of this government’s pledge to ensure everyone has equal opportunity and can fulfil their potential regardless of their background, this means a person’s gender, ethnic background or sexual orientation should never be a barrier to them achieving their all.
Lord Davies said:
Looking back to 2011, I could not have predicted British business would have embraced the Women on Boards agenda as they have, or indeed that the 25% target would have been achieved 6 months ahead of schedule.
This is truly amazing progress. I cannot thank the many, many businessmen and businesswomen enough for their significant and collective contribution. It has been a privilege to lead this campaign.
Minister for Women and Equalities Nicky Morgan said:
Lord Davies has been an inspirational champion; he has thrown the gauntlet down to business and pushed them to do more than ever before.
The government fully supports his recommendations because we are clear, that in order to deliver our commitment to extending opportunity we must do more to secure equality for women in the workplace and beyond.
The report makes recommendations in 5 key areas:
- Voluntary approach
- The national call for action and voluntary, business-led approach is continued for a further 5-year period
- Increased target, more chairs and action from all listed companies.
- Increasing the voluntary target for women’s representation in boardrooms of FTSE 350 companies, to a minimum of 33% to be achieved in the next 5 years.
- All stakeholders to work together to ensure increasing numbers of women are appointed to the roles of Chair, Senior Independent Director and into Executive Director positions on boards of FTSE 350 companies.
- All FTSE listed companies now assess the gender balance on their boards and take prompt action to address any shortfall.
- Focus on the executive layer
- FTSE 350 companies extend the best practice seen at board level to improve gender balance and fundamentally improve the representation of women on the Executive Committee and senior-most leadership positions.
- Independent steering body
- An independent steering body, made up of business and subject matter experts with a newly appointed Chair and members, is reconvened to support business in their efforts, act as a catalyst for sustained progress, monitor and report periodically upon progress.
- Maintaining momentum
- The newly convened steering body will review the recommendations 1 to 4 above and in consultation with key stakeholders, publish more detailed comments as appropriate, at the beginning of 2016.
Baroness Neville-Rolfe, Business Minister said:
Through a voluntary, business-led approach, we have doubled the number of women taking their seat at the top table of business - an achievement we can all be proud of.
With support from government, the UK’s top firms and female directors have led by example and demonstrated the valuable contribution women make. But the task is not over, by developing the pipeline of talent, more businesswomen will have the opportunity to succeed and even more firms will benefit from the competitive advantage a diverse workforce brings.
The announcement follows an announcement from the Prime Minister and Nicky Morgan where they set out new measures to eradicate gender inequality in the work place and remove barriers to women’s success.
Melanie Richards Vice Chairman of KPMG said:
As sponsors, we are delighted to support the launch of today’s report. The challenge now is not simply to maintain momentum, but to redouble our efforts to see the success in the non-executive pipeline, mirrored in the executive pipeline.
Identifying and promoting diversity will deliver real benefits for business, both financial and non financial. By tackling homogeneity, boards should make more robust, balanced decisions and no longer run the risk of echoing the voices of the few.
The government has pledged to: * force larger employers to publish information about their bonuses for men and women as part of their gender pay gap reporting * extend our plans for gender pay gap reporting beyond private and voluntary sector employers to include the public sector * work with business to eliminate all-male boards in the FTSE 350
The government also wants to see further progress in the number of women making it to senior executive and executive director roles across all sectors, not just the corporate world. That’s why we have made changes to modernise the workplace and also develop the female executive pipeline. We have:
- extended the right to request flexible working to all employees
- introduced a new system of flexible parental leave
- funding for 30 hours of free childcare a week for working families with 3- and 4-year-old children
- provided support for women’s enterprise - now ranked number 1 in Europe
- GEO supporting research looking at the vast talent pool of women in board roles outside the private sector (eg charity sector and higher education)
Susan Vinnicombe CBE, Professor of Women and Leadership at Cranfield said:
Cranfield has been measuring the number of women on boards for 16 years, so we are of course delighted to see such progress, especially in the last few years. We do however remain acutely aware that the big challenge ahead is to tackle why there are still so few women at executive level - 9.6% is just not acceptable.
Our research shows that the pool of new talent available for board positions is expanding and the women have plenty of relevant board experience. We must now turn our focus to opening up executive level positions to these very capable and credible women.
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