This morning the Davies Committee published their latest report - the 2015 Lord Davies Women on Boards Annual update.
The good news is that the goal set by Lord Davies to have 25% of women directors on FTSE 100 boards by the end of 2015 is within reach.
Given the current rate of director turnover and proportion of new appointments going to women, we expect that the year end outcome will lie somewhere between Lord Davies’ target and the 30% Club’s slightly more ambitious one. This progress is a great result for everyone keen to see more effective boards, but we also need to stand back and consider whether the changes are sufficient.
Recent data from BoardEx shows that out of 839 non-executive FTSE 100 directorships, 83 NEDs – 10% – have served on the board for more than nine years, the maximum recommended term under the UK Corporate Governance Code. Of these, 74 are men.
Opening up some of these positions to well-qualified women, as suggested by the Cranfield 2015 Female FTSE Board Report, would accelerate what has already been significant progress.
Investors too can play a significant role in moving the dial towards better-balanced boards by signalling a greater focus on gender diversity.
The 23 members of our 30% Club Investor Group, representing approximately £6 trillion in assets under management, have become increasingly vocal on this issue. Some have signalled that they will hold company boards to account on what is a core board effectiveness and talent management issue. This is likely to be by voting against either the Chair or the Chair of the Nominations Committee if they believe there has been insufficient action, coupled with a poor explanation as to why progress hasn’t been made.
2015 is a landmark year for those of us campaigning for a better balance of men and women on corporate boards. We would actively encourage other asset managers and asset owners who are keen to build on the current momentum to become part of our efforts.
After all there is plenty more to do, especially as we have broadened our original focus to include developing the executive pipeline of female talent. We’re now aiming for 30% women at all senior levels by 2020.