One Step Closer to Boardroom Equality in the UK?

by Morgan Lewis
Contact

Reports show that the number of female board members at UK-listed companies continues to grow but that the rate of appointments must increase to meet targets for gender-balanced boardrooms.

Recently published reports from former UK government minister Lord Davies of Abersoch and the Cranfield University School of Management indicate that the push to increase the number of women on boards of UK-listed companies is slowing down. However, the UK government continues to encourage companies to address the imbalance, rather than imposing gender quotas and sanctions for noncompliance.

Women on boards 2013

On 10 April, Lord Davies of Abersoch published his Women on boards 2013 report,[1] which follows his 2011 report commissioned by the UK government to look into the poor representation of women on the boards of directors of UK-listed companies. The original 2011 report starkly highlighted the lack of gender equality amongst board members, and it set out a series of recommendations that businesses should follow to address the gender imbalance. One of those key recommendations was that, by 2015, the boards of FTSE 100 companies should be made up of at least 25% women. Importantly, Lord Davies's approach to tackling this issue, which has since been adopted as the government's approach, fell short of imposing mandatory gender quotas on companies. Instead, Lord Davies considered that a business-led approach would be sufficient to bring about the desired changes.

Women on boards 2013 provides an overview of the progress that has been made to improve female board representation in the two years since the original report was published. The 2013 report shows that women now occupy 17.3% of all board positions of FTSE 100 companies. In 2010, this figure was just 12.5%. Also encouraging is the fact that there are now only six FTSE 100 companies that do not have a female representative on the board, as compared to 21 companies in 2010. The majority of new female board appointments are to nonexecutive positions, and there is recognition that more needs to be done to replicate this increase in executive positions.

Supporters of the government's business-led approach to tackling the gender issue will likely celebrate the latest figures. In response to the report, Lord Davies stated that it shows that the UK's top companies are "stepping up and responding." Vince Cable, the UK's Business Secretary, also responded, stating that the government "continues to believe that a voluntary approach is the best way forward."[2]

Cranfield University Report

The Cranfield University School of Management published its report The Female FTSE Board Report 2013: False Dawn of Progress for Women on Boards? (Cranfield Report) on 10 April.[3] The Cranfield Report suggests that any progress made to date is of only limited significance and that the pace of change needs to accelerate if the targets set by Lord Davies in 2011 are to be achieved. The Cranfield Report shows that, in the last six months, only 26% of directors appointed to FTSE 100 boards were female. The report suggests that this percentage should be contrasted with the preceding six months, in which 44% of appointments went to women. The reasons for the recent slowdown are uncertain, however, care must be taken to ensure that companies do not lose momentum in striving to achieve a more diverse boardroom.

Dr Ruth Sealy, co-author of the Cranfield Report, warns that "Lord Davies' target for FTSE 100 companies is still in sight but only if the rate of new appointments going to women regains momentum promptly."[4]

The Cranfield Report also highlights that the percentage of women participating in executive committees has fallen from 18.1% in 2009 to 15.3% in 2013. As executive committees are typically seen as a talent pool for potential promotion to executive positions, the drop suggests that the pipeline of women for board promotion is currently not strong. This can be contrasted with the legal, marketing, and human resources professions, which are still dominated by females.

Implications

Neither Women on boards 2013 nor the Cranfield Report are likely to change the UK government's approach to tackling the lack of women on the boards of UK-listed companies. The government remains committed to encouraging companies to address the imbalance, rather than imposing gender quotas and sanctions for noncompliance. Notwithstanding this, if sufficient progress is not made by 2015 and the UK does not achieve Lord Davies's 2011 targets, there is a very real possibility that the question of mandatory quotas will be revisited.


[1]. View Women on boards 2013 here.

[2]. Press Release, Dep't for Bus. Innovation & Skills, Dep't for Culture Media & Sport, & Gov't Equalities Office, Women on boards 2013: Two years on (Apr. 10, 2013), available here.

[3]. View the Cranfield Report here.

[4]. Press Release, Cranfield Univ. School of Mgmt., Progress stalls again for women on boards (Apr. 10, 2013), available here.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

© Morgan Lewis | Attorney Advertising

Written by:

Morgan Lewis
Contact
more
less

Morgan Lewis on:

Readers' Choice 2017
Reporters on Deadline

"My best business intelligence, in one easy email…"

Your first step to building a free, personalized, morning email brief covering pertinent authors and topics on JD Supra:
Sign up using*

Already signed up? Log in here

*By using the service, you signify your acceptance of JD Supra's Privacy Policy.
Privacy Policy (Updated: October 8, 2015):
hide

JD Supra provides users with access to its legal industry publishing services (the "Service") through its website (the "Website") as well as through other sources. Our policies with regard to data collection and use of personal information of users of the Service, regardless of the manner in which users access the Service, and visitors to the Website are set forth in this statement ("Policy"). By using the Service, you signify your acceptance of this Policy.

Information Collection and Use by JD Supra

JD Supra collects users' names, companies, titles, e-mail address and industry. JD Supra also tracks the pages that users visit, logs IP addresses and aggregates non-personally identifiable user data and browser type. This data is gathered using cookies and other technologies.

The information and data collected is used to authenticate users and to send notifications relating to the Service, including email alerts to which users have subscribed; to manage the Service and Website, to improve the Service and to customize the user's experience. This information is also provided to the authors of the content to give them insight into their readership and help them to improve their content, so that it is most useful for our users.

JD Supra does not sell, rent or otherwise provide your details to third parties, other than to the authors of the content on JD Supra.

If you prefer not to enable cookies, you may change your browser settings to disable cookies; however, please note that rejecting cookies while visiting the Website may result in certain parts of the Website not operating correctly or as efficiently as if cookies were allowed.

Email Choice/Opt-out

Users who opt in to receive emails may choose to no longer receive e-mail updates and newsletters by selecting the "opt-out of future email" option in the email they receive from JD Supra or in their JD Supra account management screen.

Security

JD Supra takes reasonable precautions to insure that user information is kept private. We restrict access to user information to those individuals who reasonably need access to perform their job functions, such as our third party email service, customer service personnel and technical staff. However, please note that no method of transmitting or storing data is completely secure and we cannot guarantee the security of user information. Unauthorized entry or use, hardware or software failure, and other factors may compromise the security of user information at any time.

If you have reason to believe that your interaction with us is no longer secure, you must immediately notify us of the problem by contacting us at info@jdsupra.com. In the unlikely event that we believe that the security of your user information in our possession or control may have been compromised, we may seek to notify you of that development and, if so, will endeavor to do so as promptly as practicable under the circumstances.

Sharing and Disclosure of Information JD Supra Collects

Except as otherwise described in this privacy statement, JD Supra will not disclose personal information to any third party unless we believe that disclosure is necessary to: (1) comply with applicable laws; (2) respond to governmental inquiries or requests; (3) comply with valid legal process; (4) protect the rights, privacy, safety or property of JD Supra, users of the Service, Website visitors or the public; (5) permit us to pursue available remedies or limit the damages that we may sustain; and (6) enforce our Terms & Conditions of Use.

In the event there is a change in the corporate structure of JD Supra such as, but not limited to, merger, consolidation, sale, liquidation or transfer of substantial assets, JD Supra may, in its sole discretion, transfer, sell or assign information collected on and through the Service to one or more affiliated or unaffiliated third parties.

Links to Other Websites

This Website and the Service may contain links to other websites. The operator of such other websites may collect information about you, including through cookies or other technologies. If you are using the Service through the Website and link to another site, you will leave the Website and this Policy will not apply to your use of and activity on those other sites. We encourage you to read the legal notices posted on those sites, including their privacy policies. We shall have no responsibility or liability for your visitation to, and the data collection and use practices of, such other sites. This Policy applies solely to the information collected in connection with your use of this Website and does not apply to any practices conducted offline or in connection with any other websites.

Changes in Our Privacy Policy

We reserve the right to change this Policy at any time. Please refer to the date at the top of this page to determine when this Policy was last revised. Any changes to our privacy policy will become effective upon posting of the revised policy on the Website. By continuing to use the Service or Website following such changes, you will be deemed to have agreed to such changes. If you do not agree with the terms of this Policy, as it may be amended from time to time, in whole or part, please do not continue using the Service or the Website.

Contacting JD Supra

If you have any questions about this privacy statement, the practices of this site, your dealings with this Web site, or if you would like to change any of the information you have provided to us, please contact us at: info@jdsupra.com.

- hide
*With LinkedIn, you don't need to create a separate login to manage your free JD Supra account, and we can make suggestions based on your needs and interests. We will not post anything on LinkedIn in your name. Or, sign up using your email address.
Feedback? Tell us what you think of the new jdsupra.com!