Firms to report action taken to get more women into boardrooms
Companies in the UK may be required to report on their progress to get more women into the boardroom under proposals announced by the Equality Minister today.
New research shows that 60% of people think there are not enough women directors in big businesses. The survey which has been commissioned by the Government Equalities Office for International Women’s Day shows that half believe there will be equal numbers of men and women directors within the next 20 years. However, the reality is that it will take 60 years for women to gain equal representation on the boards of the top 100 companies at the current rate of progress.
Currently, only one in ten FTSE board directors are women, and 25 firms have no women on them at all. Women continue to be under-represented at board level despite having the right education and experience they need to succeed, and are deterred from applying due to corporate boards being dominated by “old boys’ networks”.
The research has also revealed that a clear majority (80%) think a balanced senior management team will be better at understanding their customers.
Nearly two thirds (61%) of the respondents believe businesses are losing out on talent by having fewer women in senior roles.
According to 78% of the respondents, the fact that men have more experience in senior management than women, doesn’t mean that men are better at running companies.
The research also revealed that 72% think it is important that women and men should have an equal say in the business decisions over how the British economy is run, while 55% think both men and women should share decisions in the finance sector which affect the economy.
Another significant finding of this research is that 71% believe having more women on senior management teams will lead to more family friendly working practices.
The Government has today asked the Financial Reporting Council to consider including a new principle in its code of conduct (UK Corporate Governance Code) to require firms to report on what they’re doing to increase the number of women in senior management positions. This builds on the Equality Bill which will allow firms to choose to use positive action to appoint more women to senior roles.
This morning the Prime Minister will be hosting a business breakfast at Downing Street with leading women in business, to mark International Women’s Day and to discuss the opportunities and challenges facing women's leadership in business and enterprise.
Prime Minister Gordon Brown said: “We all recognise the value of strong role models for women in all walks of life – and there are many in politics, the arts, public services, sport and the third sector. But there are too few in Britain’s boardrooms. When more than half of graduates are women, it is completely unacceptable that some of our top 100 public companies have not a single woman on their boards - and that none at all have a majority of women on their boards.
"A new principle in the governance code on diversity would build on the provisions in the Equality Bill, which allow employers to take positive action when recruiting to balance their workforce.
"But if we do not see a dramatic change in the composition of company boards in the future, we will need to consider taking more serious action to ensure companies recruit from the diverse pool of exceptional talent we have in the UK.”
Harriet Harman, Minister Women and Equalities, said: “Britain needs more women in the boardroom. This survey shows that the public want a quicker pace of change. Government is playing its part, but firms need to play their part to.
"Too many British boardrooms are still no-go areas for women. Women are important consumers and employees. We’ll never get a proper meritocracy or truly family-friendly workplaces from male dominated boards. Businesses that run on the basis of an old boy network and do not draw on the talents of all the population will not be the ones that flourish and prosper in the 21st century.”
Lord Davies, Minister for Trade, Investment and Small Business, said: “Company boards benefit greatly from the contribution women members bring. Companies who fail to grasp the growing economic power of women and rely on outdated business models are missing significant business opportunities.
"The days of male domination of business are long over. It is time for the boardrooms of Britain to be drawn from the wide pool of excellent talent we have available in the UK, or else businesses will lose out to foreign companies who are better attuned to new business opportunities."
