Are women 'on board' yet? Lord Davies publishes a progress report

Are women 'on board' yet? Lord Davies publishes a progress report


Author: Katy Meves

Last year Lord Davies reviewed female representation on corporate boards and recommended that 25% of FTSE 250 directors should be women by 2015. An update on progress to date has just been published.

Lord Davies' report recommended that FTSE 250 companies should aim for at least 25% female representation on their boards by 2015. For FTSE 100 companies this target was regarded as a minimum goal.

Since the report was published last February it appears that female representation on listed company boards has increased, but there is clearly still some way to go:

  • 47 female appointments have been made at FTSE 100 companies in the last year so that women now account for 15.6% of all directorships (up from 12.5%).
  • 11 all-male boards remain in the FTSE 100, down from 21.
  • 53 female appointments have been made within the FTSE 250 in the last year so that women now account for 9.6% of all directorships (up from 7.8%).
  • 112 (44.8%) all-male boards remain in the FTSE 250, down from 52.4%.

The first recommendation in Lord Davies' original report was that all FTSE 350 companies should announce their aspirational goals for the percentage of women they aim to have on their boards by 2013 and 2015 by September 2011. However, to date, only 38 FTSE 100 companies and 34 FTSE 250 companies have done so.

The regulatory framework

For financial years beginning on or after 1 October this year, the amended Corporate Governance Code will require listed companies to explain their policy on diversity and report on how it is being implemented in their annual reports. Companies will also be required to consider diversity, including but not limited to gender, when evaluating the effectiveness of the board. The Financial Reporting Council is encouraging all companies to disclose this information voluntarily in annual reports published during 2012.


Investors are becoming increasingly engaged on diversity issues. The Association of British Insurers announced in February 2011 that it would review what listed companies where doing in respect of board effectiveness and the role diversity plays in this, board evaluation and proper succession planning.

In November 2011 the National Association of Pension Funds (NAPF) updated its own corporate governance policy to state that it now expects boards to set out an explicit policy for achieving greater diversity and to track the effectiveness of that policy. Where this is not done the NAPF policy says shareholders should consider voting against the re-election of the Chairman of the Nominations Committee.

The European dimension

In March 2011 the EU Justice Commissioner launched the "Women on the Board Pledge for Europe", asking all European listed companies to commit to increasing the presence of women on their boards to 30% by 2015 and 40% by 2020. However, the European Commission has recently confirmed that just 24 companies across Europe have so far signed up to the pledge. Earlier this month, the Commission launched a consultation on possible legislative action at EU level to redress the continuing gender imbalance on corporate boards in Europe and this is open until 28 May 2012. Following this, the Commission is expected to take a decision on further action later in the year, and therefore the possibility of mandatory quotas for female directors being imposed on UK companies by the EU remains.

The public sector

By way of contrast, the Government has set itself the goal that women will comprise 50% of all new appointments to boards of public bodies by the end of the current Parliament. A new code of practice for making such appointments will come into effect on 1 April 2012.


Diversity is now firmly on the corporate agenda and listed companies can no longer afford to drag their feet given regulatory requirements and increased investor scrutiny. There is a real risk that mandatory quotas for female directors could be imposed if the pace of progress does not visibly increase.

While female representation is currently the focus, diversity is about more than gender and companies should consider the issue in the round. Identifying where there are talent blockages or high attrition rates internally may be the first step in developing strategies to increase the variety of the talent pool for the future.