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WOMEN IN BUSINESS CHALLENGING


Six months on from the publication of the Davies Report, it seems that more women are being appointed as Board Directors, but progress is still slow. Michelle Johansen explains why things must move on


HEN THE Davies Report was published in February this year, it proposed a radical shake up to the


l Required advertising of non-executive board positions to encourage greater diversity in applications


composition of company directorships, stating: “The business case for increasing the number of women on corporate boards is clear – companies with a strong female representation at board and top management level perform better than those without.” The Report gathered together a substantial body of evidence to support the argument for increasing female representation at the top levels of business. With headline figures of 42 per cent higher return on sales, 66 per cent higher return on investment and 53 per cent higher return on equity, plus improved corporate governance, the message is clear – women are good for business. At the time, Lord Davies, the author


of the Report, said: ”Women take their non-executive director roles more seriously, preparing more conscientiously for meetings. Women ask the awkward questions more often, decisions are less likely to be nodded through and so are likely to be better.” The Report made a number of key recommendations focussed on reporting and governance measures, including:


l FTSE 100 boards to have a minimum of 25 per cent female representation by 2015 l FTSE 350 Chairmen to set out targets for 2013 and 2015 by September 2011 l A Voluntary Code of Conduct for executive search firms to address gender diversity for FTSE 350 board appointments


Over six months since the report, and with the September deadline gone, what is the evidence that actual change is occurring?


Self-regulation or quotas? Some sensational headlines have been circulating about FTSE 100 companies that have blatantly ignored Lord Davies’ findings, but according to analysis conducted by The Observer, in the six months since the Report came out, FTSE 100 companies doubled the number of female board appointments compared with any similar period. That said, the numbers were relatively low to begin with, which means that now 13.3 per cent of FTSE 100 board members are women (up from 12.5 per cent in 2010). And of course, this increase could just be coincidence.


With 53% higher return on equity and 42% higher return on sales, the figures are clear – women are good for business October/November 2011 businesslife.co 45


THE STATUS QUO W





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