Lord Davies published his second annual progress report this week on the issue of Women on Boards. Back in February 2011, he made a number of recommendations to increase the number of women on the boards of listed companies. The Government responded by setting a target that FTSE 100 boards should aim for a minimum of 25% female board member representation by 2015. So, what progress has been made in the last two years?
According to Lord Davies, good progress has been made. As of 1 March 2013, women account for 17.3% of all directorships in FTSE 100 companies and 13.2% in FTSE 250. This is up from 10.5% and 6.7% respectively in 2010. According to a study published this week by the Cranfield School of Management, in the first six months after the last report was published (March 2012), 44% of new FTSE 100 appointments were going to women and 36% in FTSE 250 companies. However, the study also shows that these levels have actually dropped to 26% and 29% respectively in the last six months. Both Lord Davies and Cranfield fear a sense of complacency developing within companies. According to Cranfield, the promising signs of progress are "losing momentum" and the rate of new female appointments needs to regain momentum promptly if companies are to hit Lord Davies' target.
As Lord Davies points out, the lack of women on boards is a global, not just a UK, issue. The European Commission is pushing an EU directive requiring listed companies to ensure that at least 40% of non-executive directors are women. The UK, however, is in favour of a voluntary, rather than mandatory approach and is blocking the directive. Yet, in light of this week's figures, Vince Cable has warned top companies that if they don't appoint more women onto boards voluntarily, he will take steps to force them by law to make more female board appointments. The lack of progress is therefore a reminder of the possibility of quotas being introduced if the 2015 target is not met and continuing efforts are not made to improve equality in senior positions.
Lord Davies published his second annual progress report this week on the issue of Women on Boards. Back in February 2011, he made a number of recommendations to increase the number of women on the