The Davies Review is the UK government’s recently published report into women in the boardroom. The government ordered the review into gender equality on the boards of UK listed companies after statistics revealed that only 12.2% of directors of FTSE 100 companies are women. London Registrars (http://www.london-registrars.co.uk/) is responsible for advising on company compliance, including the make up of the boards of listed companies. Here, it considers the findings of this review and the impact on listed companies around the UK.
Research carried out by Cranfield University revealed that only 12.2% of directors of the FTSE 100 companies are female while female directors of FTSE 250 companies make up just 7.3% of the total number of directors. In fact, nearly half of FTSE 250 companies do not have any women on the board at all. These are surprising statistics given that women make up 46% of the economically active workforce in the UK and seem to indicate that women are being denied the opportunities of their male counterparts at top management level.
Lord Davies of Abersoch, the former chairman of Standard Chartered PLC and a former Government minister states: “While it is essential that the boards of UK companies are meritocratic, the fact that there are only 131 female directors in FTSE 100 companies means that we cannot be using all the skills and talents that make our workforce so competitive. I am looking forward to leading this work and hearing the views of those with an interest in this area. I hope to help more women to rise to the top of their professions and become our business leaders of the future.” The Davies Review considered options for promoting gender equality at board level, looked at the obstacles facing women and sought to encourage debate and proposals for change. The report concluded that FTSE 350 boards should aim to have a minimum of 25 per cent female representation by 2013 and 2015.
London Registrars advises its clients on the UK Corporate Governance Code and it is likely that the recommendations arising from the Davies report, although not a legally binding mandatory quota system, will soon be adopted within this code. London Registrars also has responsibilities relating to board assessment either as a group or individually. Current best practice is that assessments are carried out internally on an annual basis (which includes using a company such as London Registrars for company secretarial services) and every third year using external consultants. The board target for all new appointments from March 2011 will be 2/3 male, 1/3 female. All listed companies in the UK will be expected to use their corporate governance statement to report each year on the number of female board members and the proportion to the number of male board members, as well as reporting on the number of women in senior executive positions, and the number of women employed company-wide. Companies found to be lacking in evidence of progress towards meeting the targets may face a mandatory quota on an individual basis.