Newly published research on behalf of the High Pay Centre and the Guardian newspaper indicates that compulsory quotas to ensure more women serve on the boards of limited companies are not entirely succeeding, reports corporate governance experts London Registrars (http://www.london-registrars.co.uk/).
At the same time as a separate report from the Association of British Insurers warned that a “key area of concern for shareholders remains the lack of women executives in boardrooms”, the High Pay Centre research also shows a real lack of women in executive roles and that the compulsory quotas have not increased women’s prospects of running big business.
The research, carried out by headhunters Korn/Ferry Whitehead Mann reveals that quotas are boosting the number of non-executive women directors but the number of women in senior management remains low. In Norway, as much as 35% are non-executive women directors after companies were made to appoint women to 40% of boardroom seats from 2008 onwards. However, the number of women in senior management positions in Norway has only risen from 15% to 18% in the past five years, and there are no female chief executives at the head of any Norwegian company at this time. In contrast, the US has the highest number of female chief executives and women are in charge of 20 of the S&P 500 leading companies, a country where no board gender quotas exist.
Sonamara Jeffreys, managing director of Korn/Ferry Whitehead Mann, said, “The research begs the question as to whether quotas are truly effective in driving material change at the executive level, with many of those European countries that do have board quotas having few female senior leaders, and several having no female chief executives,”
The High Pay Centre report warned: “There is a danger that appointing women to non-executive board positions is used as window dressing for companies that are doing little to promote women through the executive ranks. There is a danger that governments believe they have fixed the diversity issue by introducing quotas on overall board membership whilst not addressing the dearth of women actually running companies.”
As part of its company secretary and company compliance services, London Registrars advises boards on the most recent legislative changes which impact board issues, such as board gender quotas. For further information visit the website at http://www.london-registrars.co.uk/.