Monday, 13 December 2010

Lord Davies considers forcing FTSE firms to appoint more female directors

The Sunday Times reported 0n 12 December 2010 that Lord Davies, who is preparing a report for the UK government on how to remove obstacles to women making it to the board, is considering recommending the imposition of a gender quota for listed companies. This follows the annual report and index in the FTSE Female Board Report from the International Centre for Women Leaders at Cranfield Business School. They claim their data shows a plateauing of a previous gradual improvement in female representation on big company boards. Actually, looking at their data, it seems to be continuing very slow improvement but very slow and at a very low level. Worse, if anything, most of the female FTSE 100 directors are non-executive – a mere handful are executive directors. They recommend a quota to redress the balance.

The UK Corporate Governance Code recommends diversity in the boardroom.

But all this misses the point. Until companies feel able to accept flexible career paths very few female directors will be appointed to boards on merit. The women that do make it will generally be those who have chosen, or been forced by the constraints of their career, not to have children. Companies expect their senior executives to be there the whole time – it is a rite of passage – they can’t cope with career breaks nor with flexible hours. In this way they waste the talent of half of the population. Redressing this narrow mindedness is the way forward, not imposing quotas.

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