Lord Davies considers gender ratio

Posted on 8 Nov 2010 by The Manufacturer

With organic measures to appease the situation having seemingly failed, gender equality could soon be imposed on UK boardrooms.

Lord Davies of Abersoch – a business minister under Gordon Brown in 2009 – has been tasked by the Department of Business Innovation and Skills (BIS) with investigating why there are so few women in directorship roles in the UK. According to Cranfield University, only 12.2 per cent of FTSE 100 and 7.3 per cent of FTSE 250 directors are female.

BIS has a call for evidence open on the subject which runs until the end of November and it will use this along with Davies’ findings to publish recommendations in a report next February.

Over the weekend, Davies hinted in the national press that a set ratio of male to female directors could be imposed and he may stipulate that as many as four in ten must be women.

“My view is that to say 20 per cent of people on a board should be women is not enough,” he said. “It has to be 30 per cent to 40 per cent to make a real change.”

Though equality campaigners will welcome Davies’ intonations, there will be those that believe businesses in a free market should be left to elect whom they choose to the board.

The BIS call for evidence recognises both stances but, contrary to traditional Conservative ideology, implies that a strong hand from government could best benefit UK companies in this instance.

“While UK boards must be meritocratic, the low proportion of women holding directorships suggests British business is not using all of the skills and talents of the workforce effectively and women are being denied the opportunity to reach their true potential and contribute fully to the UK economy,” it says.

“The business case for increasing the number of women on boards is clear. Evidence suggests that companies with a strong female representation at board and top management level perform better than those without and that gender diverse boards have a positive impact on performance, being better able to understand their customers and stakeholders and benefit from fresh perspectives, new ideas, vigorous challenge and broad experience which in turn lead to better decision making.”

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