I’m delighted to be here tonight to celebrate the 30% club becoming 50. The fact that we now have 53 chairmen championing this initiative, shows that the benefits of diversity in the boardroom is now becoming very much a mainstream idea.
And I would like to praise the vision and leadership shown by Helena Morrissey and the founding members of the 30% club, for putting and keeping this issue at the heart of current business and political debate.
Whenever I talk at a 30% club event I do sometimes feel like I’m preaching to the converted. But I do think it’s important that we remind ourselves, the business community, and the wider public of the evidence that more women in a company’s boardroom is not only good for society, it’s also good for that company’s bottom line.
Recent research shows that companies with more diverse boards produce better results - with greater sales, 66 per cent higher returns on invested capital and 50 per cent better returns on equity.
A Business-Led Approach
So it is firmly in the interests of business to have greater diversity in the boardroom. And that’s why I agreed with Lord Davies, when he recommended in his report to Vince Cable and me, that we should take a business-led approach to getting more women onto the boards of our top companies.
I’ve been impressed with the way business has responded to this challenge, and I’ve been impressed with the leadership shown by the 30% club.
The latest figures from the professional boards forum, published last week, show even more progress.
Women now account for 16.7 per cent of FTSE 100 board members - up from 12.5 per cent in 2010, putting us on track to meet Lord Davies’ stretching target of 25 per cent representation by 2015, and with a quarter of FTSE 100 companies already having reached that level.
Most encouragingly, we are also now seeing progress in the FTSE 250, with 10.9% of FTSE 250 board directors now women, up from 7.8% last February.
That continuing progress shows what can be done without resorting to quotas.
But despite that good progress, there are still concerns. For example, I am particularly worried that so many female FTSE 100 board members are non-executive directors, rather than executives.
I believe companies need to do much more to develop the pipeline of talent from intake, through to senior positions, up to the boardroom and on to CEO.
Government action can help of course - our new system of flexible parental leave will help working mothers and our policy of extending the right to request flexible working to all employees will help flexible working to continue to be seen as a modern and sensible way of running a business.
But, just as with getting women onto company boards, developing the female talent pipeline must be a business led process.
Many of our most forward thinking businesses know this. They realise they can’t afford to neglect their valued female staff and they are taking action.
Think, Act, Report
Some of our top firms - like Tesco, Unilever, BT and Eversheds- are now involved with a new Government initiative to improve gender equality in the workplace and spread best practice that’s called think, act, report.
Think, act, report is aimed at all businesses with over 150 staff. The process - which you can find online - involves first identifying any issues around gender equality in your workforce; then taking action to address those issues; and finally reporting publicly on progress.
Many of you who are interested or involved with the 30% Club, will have strong track records of championing diversity. I want to ask you all 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.
The continued growth of the 30% club, and the continued growth in the numbers of women on the boards of our top firms, shows that business now recognises the benefits of boardroom diversity. And that recognition is leading to real action and real progress.
Of course, more needs to be done, for example on the talent pipeline for so that more female executive directors come through the ranks.
But I am confident that by government working together with business we can achieve the real and lasting change that we all want to see.
Thank you and well done to the 30% club. We’ve come a long way but there’s a lot more to do.