Thank you for that introduction.
I’m delighted to be here today and to see so many of our leading businesses in the audience.
I’m proud of Britain’s business sector. I believe we have some of the best companies in the world. But I have rarely been more proud of British business than I am today.
Over the past year we have seen an unprecedented increase in the number of women on the boards of our top companies.
Today, I want to talk to you about why that progress has happened, why it’s important and how we can keep bringing about the change that is good for women, good for our economy and good for British business.
Why having more women on boards is important
The UK, European and World economies continue to face significant challenges. In these tough times, both government and business are looking for every available competitive advantage.
So it is no wonder that more and more of our top companies are recognising the fresh perspectives, innovative ideas and outstanding experience that women business leaders can bring.
Those companies understand that they can’t afford to ignore the skills and talent of half the population.
They know that a company board that better reflects its customers is better able to understand their needs.
And they’ve seen the research which shows that companies with more diverse boards achieve higher sales, higher returns on invested capital and higher returns on equity.
So they see that this is not just an issue of fairness or equality, this is an issue of economic strength.
When women make 70 per cent of household purchasing decisions, companies know they need decision makers who can understand and appeal to women.
And when companies with more women on their boards achieve more than 50 per cent better return on equity and 66 per cent better return on capital than their less-diverse counterparts, it’s no wonder that companies and investors are demanding change.
A business-led approach
It’s because it’s in the interests of business to get more women onto their boards, that I was always clear that we should take a business-led approach to the problem.
Of course quotas can sometimes offer a short cut or a quick fix to increase female representation.
But, as today’s reports show, significant progress can be made through a business led approach.
Yes, it’s hard work.
Yes, progress sometimes isn’t as quick as we all might like.
But as a woman, I never wanted to get anywhere because I was part of a quota. I wanted to get there because I’d worked hard for a job and because I deserved it. And I think that’s exactly how most women in this country feel.
Real change doesn’t come from government bullying business, by preaching to them or telling them what to do.
By letting business take the lead, business can drive change in a way that works for them, that’s flexible and that suits their needs.
And in that way, we can achieve lasting, meaningful change.
So what is government’s role in this brave new business-led world?
Well, we can start by challenging ourselves. That’s why we have set ourselves the target that 50% of all new appointments to the boards of public bodies by the end of the current parliament should be women. And the percentage has gone up in the plast year to over 36%.
Government can also put in place a framework that can help change to happen.
That’s why we’re seeking to help women to balance work and family life, and to help business to get a more flexible workforce, by extending the right to request flexible working.
In a globalised world, business hours no longer run from 9 to 5. Overseas customers are still buying, foreign markets are still trading - and so British companies need to keep working. And that means they need a flexible workforce.
Many of our most forward-thinking employers already recognise this. They know that flexible working helps them draw on a wider pool of skills and talent, improves staff morale and productivity, and helps them keep valued members of staff.
But as a government, we can do more to encourage the shift that is already happening in our society and in our economy. And that’s why we’re extending the right to request flexible working to all.
And we can go even further.
That’s why we are bringing in a revolutionary new system of flexible parental leave.
The current system of maternity and paternity leave just reinforces the old stereotype that when a couple start a family, women should stay at home and look after the children and men should go out to work and earn the money.
But if a woman is near the top of her company then that might not make sense to the family. Equally, the father may simply want to take on more of the caring responsibilities. But at the moment, that’s just not allowed.
It shouldn’t be up to the state to decide how couples should split their parental leave.
That’s why we’re helping out working parents by giving them the chance to choose what is right for them and what is right for their family.
That will make a real difference for working women and it will make a real difference for fathers.
But perhaps the most important thing government can do is to shine a light on this area.
That’s why we commissioned Lord Davies, the former chairman of sandard chartered, to report on how to get more women into the boardroom.
Lord Davies recommended that all FTSE 350 companies should set their own, challenging targets for female board representation.
He said that all FTSE 100 companies should be aiming for a minimum of 25% of their boards to be women by 2015, with many expected to achieve a much higher figure.
And he made a number of specific recommendations that have been followed through:
- The Financial Reporting Council amended the Corporate Governance Code to strengthen the principle of boardroom diversity.
- The head-hunting industry developed a new code on diversity to help bring forward a wider range of candidates for appointment.
- And institutional investors have increasingly begun to ask companies to demonstrate their commitment to this agenda.
I fully supported Lord Davies’ call for a voluntary, business led approach. The results of that approach are published today.
In the last year we have seen the fastest and largest ever increase in the percentage of women in the boardrooms of our top companies.
The percentage of new appointments to FTSE 100 boards that are going to women has nearly doubled.
The number of boards with no women on them has almost halved.
For the first time ever, a majority of FTSE 250 boards now have at least one woman.
And, if such strong progress continues, then by 2015 the percentage of women on the boards of our top firms could more than double, outstripping even Lord Davies’ ambitious target.
But the key word here is ‘if’ - ‘if’ such strong progress continues.
Yes, we’ve seen the fastest ever increase in the number of women on boards and there are now more women in the boardroom than ever before. But that means women still only account for just over 15 per cent of all directorships.
So this is no time for complacency, especially with the potential threat of European intervention.
The businesses here today should be proud of what they have achieved.
But I now want to see all companies in the FTSE 350 following Lord Davies’ recommendation - and the example of our hosts Barclays - in setting themselves an aspirational target for female representation.
And we’re going to be looking at why we are still not seeing more women at senior executive, rather than non-executive level.
So we will be working with Lord Davies - whose efforts in this area have been truly remarkable - and with key businesses and other organisations to continue to drive progress on all of these areas.
But women on boards is not the only area where we are working with business to bring about change.
We’ve also introduced a new simple, step-by-step approach to support businesses in improving transparency and tackling barriers for women in the workplace. It’s called think, act, report.
The process - which you can find online at the ACAS website - involves first identifying any issues around gender equality in your workforce. Then taking action to address those issues. And finally reporting publicly on progress.
And I’m pleased that we’ve already havegot support from some of our leading firms like Tesco, Unilever, BT and Eversheds.
I know many of you have strong track records of championing diversity and many of you already report on your activity because you know it makes good business sense to do so.
I want to recognise your good practice and to ask you to champion the principles of think, act, report so that other firms can see that the best are taking the lead and they should follow.
Thinking, acting and reporting has a number of benefits. Thinking about gender equality in your workplace shows you’re taking it seriously and can expose important underlying issues. Taking action can help deal with important problems like retaining talented female staff.
That action might be to build a pipeline of women to board level. Or it might be to put in place an internal development programme to bring through talented women. And that might help bring more women through at senior executive level, the issue I mentioned earlier.
But there are real benefits for companies, as well as for women and for society.
Transparent reporting is a powerful tool in demonstrating the progress employers have made. It shows staff what is happening in their firm. And it lets customers decide where they want to take their business. So being part of Think, act, report lets everyone know that your company is at the forefront of change.
The other important recent announcement I made for women in business was that we will establish a women’s business council to advise the government on how to maximise women’s contribution to our future economic growth.
The council will identify the barriers and challenges that prevent women from achieving their economic potential and will come up with ideas for overcoming those obstacles.
We will consult the council on the impact of proposed policy announcements on women in business.
And the council will have access to expertise from inside and outside government to inform its work.
The council will not be just another talking shop or publicity vehicle.
It will be a focused, one-year working group, with the sole aim of ensuring real action by government, business and others to maximise women’s contribution to economic growth.
I know a lot of business people have ideas for increasing women’s economic potential. I want to harness those ideas. And that’s what the new Council will do.
So I am delighted to announce today that I have appointed Ruby McGregor-Smith, the CEO of the leading outsourcing and energy services company MITIE, as chair of the council.
Last year Ruby was named business leader of the year at the orange national business awards.
She will bring exceptional drive and leadership to this important new initiative, which I believe will be a really positive move for women in business, for women’s enterprise and for our economy as a whole.
Today’s reports from cranfield and Lord Davies are both great news for women and great news for British business.
They show that a business-led approach can start to bring about real change in the boardroom.
But there is still a long way to go.
There are still too few women in theour boardrooms.
There are still too many companies without any women on their boards.
And there are still too many firms who are not taking this issue seriously.
I am determined to change that and to get women to the very top of our best companies and to the very heart of our economic future.
With the help of Lord Davies, and with the example of all the outstanding companies here today, I believe we can continue to make the boardroom more equal and so make business more successful.