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More women on British boards is a triumph

October 30, 2015
Diversity & Inclusion

Lord Davies has published his final report, recommending a third of all boardroom positions be given to women. 30% Club chair Brenda Trenowden outlines the challenges

This morning saw the publication of the final ‘women on boards’ report, by Lord Davies, tackling the topic of women in Britain’s boardrooms.

Since its inception in 2010, the fight to achieve female parity on boards has been increasingly high on the agenda – and today sees the culmination of all the great work that’s been put into achieving it.

The 30% Club, for which I am global chair, has collaborated closely with the Davies commission since our own beginnings in 2010. That the Government’s aim of 25 per cent of women on boards by 2015 has been met and surpassed (we’re now at 26.1 per cent) is a significant success for us all.

But this is just the first major milestone in a much longer journey to gender balance in business and diversity at all levels of organisations.
workers in the City of London

Our campaign’s original target of 30 per cent and Davies’s original target of 25 per cent were set solely for FTSE 100 boards, simply because cultural change in large organisations starts at the top.

It was also for more pragmatic reasons: data is readily available at that level and therefore easy to measure and report.

Now, almost five years on, with 550 new female appointments and female representation up from 12.5 per cent, we can see there has been a genuine shift in mind-set across British boardroom. Opening the door to gender diversity has encouraged a move towards a much broader ‘cognitive diversity’.

As is noted in today’s final report, chairmen now are now convinced of the business imperative for diversity – they no longer ask why they should have better balance, only how they can go about achieving it.

The other interesting thing to note is that the UK stands in sixth place in the international rankings of women on boards, with all the countries ahead of us having largely introduced legislative quota regimes.

The fact British businesses have been architects of their own change are very important, as it will make that change much more sustainable going forward.
So where next?

We need to move down the pipeline to the executive committee level within organisations. We also need to tackle the FTSE 350 and FTSE 250.
Lord Davies has rightly used his review to call for a rise in the level of female representation at board level from the current 25 per cent to 33 per cent by the end of the decade – and expanded his recommendations to include firms in the FTSE 350, rather than just Britain’s top 100 companies. At FTSE 250 level, he also recommends one in three new appointments go to women.

The number of women in FTSE 350 boardrooms may have increased to 682 from 289 four years ago – but there are still 15 companies that have no women in their boardrooms at all.

Changing cultural norms in a large organisation, and in society in general, doesn’t happen overnight.

The Davies report suggests having stakeholders dedicated to working on the appointment of women to leadership positions.

We at the 30% Club are advocating concerted, consistent and cohesive actions from ‘schoolroom to boardroom’. This means speaking to young women and men in secondary state schools, mentoring schemes and business school scholarships

We need to help girls believe they can climb the ladder and be business leaders on their own merits (currently just five FTSE 100 bosses are women).

The Davies report also noted that investors are key stakeholders here.

Many of the 27 institutions who make up the 30% Club’s investor group gave input to the report. They recognise that better gender diversity at board level, executive committee and below, form an important part of good corporate governance.

Unfortunately the majority of the investment community has yet to follow this up, with actions such as voting against re-election of existing chairmen and challenging to CEOs. The investment community has its own diversity challenges, which is perhaps being reflected in its lack of change to date. We are issuing a ‘call to action’ to asset managers and owners to move beyond words to actions.

At the launch of the report this morning, minister for women and equalities Nicky Morgan rightly noted that gender balance in “every workplace, every sector and every boardroom” is an “economic imperative and a moral necessity” – but that we are only “halfway there”.

We agree. We should congratulate ourselves on our progress to date, but this is not a time to break out the champagne. We really can’t afford to be complacent, as our current position is not sustainable without a lot more work. It could easily slip backwards.

We must use the momentum we’ve achieved and move on to the next phase of this campaign. The 30% Club’s focus beyond 2015 will be in three key areas: continued activity with chairmen and boards; increased focus on pipeline initiatives and a target for the executive layer; and further development of our international chapters.
Only then do we stand a fighting chance of gender parity in Britain’s boardrooms by 2020 and of retaining our place at the forefront of international rankings. And I truly believe we can do it.

By Brenda Trenowden

Source: The Telegraph

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