Firms 'ignore Davies report targets for women'
- 12 October 2011
- From the section Business
Two-thirds of FTSE 100 companies have failed to draw up targets for the numbers of women on their boards.
In February, an independent report by Lord Davies called on chairmen to announce their targets for female representation within six months.
The aim was to increase the number of women at director level, with a 25% target but no mandatory quotas.
But an official progress report by the Cranfield School of Management found only one-third had set targets.
Ruth Sealy, co-author of the progress report, said Lord Davies' recommendations had reinforced good practice.
"But they also demonstrate an institutional inertia, whereby companies persist in their existing approach - or lack thereof - to gender diversity on boards," she said.
Prime Minister David Cameron is writing to all FTSE 350 companies that have failed to respond. He will say he wants more businesses to spell out their commitment to diversity.
However, since the report was published, 22% of all FTSE 100 appointments have been female. That compares to 14% of women directors in the FTSE 100 overall.
Baroness Sheila Noakes is one of those appointments, joining the RBS board as a non-executive directors in August.
She told BBC Radio 4's Today programme she was against this fixation on numbers and did not want quotas, as had been introduced in Norway and Spain.
Baroness Noakes said that instead, companies should concentrate on women further down the management hierarchy, to "make sure [there is] a flow of women coming through the ranks in general".
Women could then have more executive roles on the board, rather than non-executive ones.
Katja Hall, from business group the CBI, said the voluntary approach was paying off.
"At the end of 2010, there were 88 women on FTSE 100 boards, rising to 156 by the end of August 2011," she said.
"This shows progress is being made, but more needs to be done to build a strong pipeline for female talent to reach the top."
From October 2012, the Financial Reporting Council (FRC) will have tougher rules. Listed companies will have to spell out their policy on diversity, with "measurable objectives" set to implement it and progress made.
The FRC wants companies to apply it immediately on a voluntary basis. The council hopes that by detailing in the corporate governance code that boards need to set out diversity policies, it can force them to devise them in the first place.