New report highlights general mood against mandatory quotas and a preference for voluntary targets of 50 percent female representation at board level. As the fourth anniversary of the Lord Davies review approaches.
The CIPD, the professional body for HR and people development, is urging businesses to accelerate the pace of change for female representation on boards, highlighting that there has only been a 1.8 percent increase at executive director level in FTSE 100 companies since 2012*. While some progress has been made, the CIPD says that the pace of change must accelerate. This is the clear message that will be discussed later today when the CIPD joins forces with Business and Women & Equalities Minister Jo Swinson MP and other business leaders to launch new research on the issue and to discuss progression routes for women into senior roles.
At the event, the CIPD will urge more businesses to improve visibility of women in both executive and non-executive roles. In particular the professional body is calling for businesses to adopt a separate voluntary target of at least 20 percent female executive directors among FTSE 100 firms by 2020. This call to action and the issue of quotas versus voluntary targets will be discussed in detail at the event by Jo Swinson MP, 30 percent Club founder Helena Morrissey, economist and author Vicky Price, Ann Pickering, HR Director for O2 UK, as well as CIPD’s Diversity Adviser Dianah Worman OBE.
The event will also mark the launch of the CIPD’s latest research on gender diversity in the boardroom. Gender Diversity in the Boardroom: Reach for the top explores perspectives on female representation as well as practical strategies for improving gender diversity at the top of organisations. It found that a clear majority of businesses surveyed (60 percent) were against mandatory boardroom quotas and think that voluntary targets, greater initiative awareness, workforce monitoring and building sustainable strategies are the most effective ways to improve long term gender diversity, both in the boardroom and beyond.
Jo Swinson MP, Minister for Business and Women & Equalities, said: “Gender diversity in the boardroom simply makes good business sense. There is growing evidence that companies with more women on their boards do outperform their male-dominated rivals and we are starting to see a change in corporate culture at the top. “FTSE boards have made fantastic progress since the Davies Review launched in 2011 but we must keep up the momentum to reach our 25 percent target by 2015. The potential threat of EU mandatory targets should be at the forefront of companies’ minds, if they are unable to show that they are doing their part to improve gender diversity. “I urge businesses to continue championing talented women to deliver lasting change. This latest CIPD report rightly points to the need to increase the number of Executive Director appointments and I look forward to seeing our latest statistics in March, to see how we are progressing.”
60 percent of respondents are against mandatory quotas and 53 percent suggested that the government should set a more ambitious voluntary target to improve gender diversity in boardrooms post-2015. When asked what this target should be, a voluntary target of 50 percent was the most popular choice. Just under half (49 percent) of organisations monitor the gender profile of their workforce at all levels, including senior and board roles. More than a quarter (28 percent) do not monitor the gender profile of their workforce at all
89 percent of respondents think that a good level of gender diversity can improve boardroom effectiveness. 50 percent would like to see a separate target to help increase the proportion of women in executive director positions, with 38 percent disagreeing and 12 percent unsure. 64 percent of respondents said that an open and supportive culture that encourages gender diversity is the most effective way of improving gender diversity at board level. Second most important was unbiased recruitment and selection practices to attract diverse talent pools (cited by 56 percent). Over half (56 percent) of respondents are aware of the Lord Davies Review, however, a sizeable proportion (44 percent) are not. Just 17 percent of survey respondents are aware of the ‘Think, Act, Report’ initiative.
Dianah Worman OBE, Diversity Adviser at the CIPD, said: “There has been progress which can be seen in the rising percentage of women on boards over the last few years towards the Lord Davies target and that should be recognised. However, the gains in the main have been made in non-executive positions whereas the numbers for women in the top spot executive positions and visible to the wider organisation still only accounts for 8.4 percent. Seeing is believing and that’s why our specific call to Government is to have a separate voluntary target of at least 20 percent for female executive directors on the boards of FTSE 100 boards by 2020 so we can have a true goal and measure for progression right at the top.
“Boardroom diversity is not a numbers game and not just about women. It is also not just about the boardroom, but rather understanding and monitoring the entire workforce in order to create clear talent pipelines which allow women to reach the top. Organisations need to be receptive to this and aware of initiatives such as ‘Think, Act, Report’ in order to encourage more women to progress to these positions. We hope the doors that have helped to increase female representation thus far will stay open for broader diversity in the workforce.”