Women on boards and equal pay
Jo Victoria Russell, freelance writer, provides an update on where the UK stands following Lord Davies’ recommendation of a minimum of 25% female board member representation in listed companies by 2015 and what role this has in the gender pay gap debate
F
our years ago, the number of women on corporate boards in the
UK presented a grim picture. Back then, women comprised a mere 12.5% of the FTSE 100 board positions, which was up from 9.4% in 2004 (based on research from Cranfield University). A report by the Equality and Human Rights Commission in 2008 implied that it would take more than seventy years to achieve gender-balanced boardrooms in the country’s largest 100 companies. It was clear that something had to be done to change the status quo. Subsequently, in August 2010 the government commissioned Lord Davies to develop a business strategy to increase the percentage of female board members within companies. He was also asked to explore the obstacles inhibiting women from reaching senior decision-making roles in business. Ambitiously, he recommended that UK-listed companies in the FTSE 100 should aim for a minimum of 25% female board member representation by 2015. He also suggested that all chairmen of FTSE 350 companies should set out the percentage of women they aim to have on their boards in 2013 and 2015. It was his intention to place the onus on employers to encourage a culture change from the
Radical change is needed in the mindset of the business community if we are to implement the scale of change that is needed.
Lord Davies, Women on Boards 2011 inside out. In his report, Women on Boards
(February 2011), Lord Davies explained the clear business case for having more female representation on corporate boards. He said: “Women are successful at university and in their early careers, but attrition rates increase as they progress through an organisation. When women are so under-represented on corporate boards, companies are missing out, as they are unable to draw from the widest possible range of talent.” He continued: “This is not about aiming for a specific figure and is not just about promoting equal opportunities but it is about improving business performance. There is growing evidence to show that diverse boards are better boards, delivering financial out-performance and stock market growth.” Fiona Hathorn, Managing director of
Women on Boards UK, an organisation for women seeking to leverage their professional skills and experience into board and leadership roles, fully
...THE REVIEW CONFIRMED THAT EMPLOYERS WERE STEPPING UP AND IMPLEMENTING THE CHANGE NEEDED...
28 PayrollProfessional
agrees and believes that diversity in the boardroom is key to business success. She said: “More than ever companies in all sectors need new thinking, new blood and new people with difference experiences. Research has shown that the more diverse a group is the more likely it is to reach the correct and profit-enhancing answer. Most companies today recognise that they are operating in a global market, so a diverse board is required to ensure changing client needs are understood and the business is able to respond and adapt quickly to change.”
Danny Done, Managing director of
Portfolio Payroll, the UK recruitment agency specialising in the payroll industry, is also of the same opinion. He commented: “I’d like to see more companies take advantage of having female directors at board level – they can bring fresh thinking, a different take on business issues and why should the boardroom be male-orientated? Equality is the way forward and I look forward to seeing more women at board level in the future.”
So, how far have businesses come in the last three years since Lord Davies’ initial recommendations?
Very promising In April 2013, Lord Davies presented
HRfocus
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