Lord Davies, former chief executive of Standard Chartered, will tomorrow (24 February) announce recommendations resulting from his inquiry into barriers preventing women from taking top jobs in the UK boardroom. He is expected to call for a fifth of FTSE 350 board members to be women by 2013, rising to a quarter by 2015. Meanwhile, European Union Justice Commissioner Viviane Reding has targeted that 30% of board directors will be women by 2015 and 40% by 2020. To achieve this it is possible businesses will be faced with the enforcement of quotas.
Is this going to be a massive shift?
Only 12.5% of directors in FTSE 100 companies are women. This figure hasn’t changed in the last three years. In the US, women currently hold 15.7 percent of board seats at Fortune 500 companies. In both 2009 and 2010, more than 50 percent of these companies had at least two women board directors, yet more than 10 percent had no women serving on their boards.
There is an issue and it is right that it is being addressed. At the same time it is important to recognise that there has been great progress. Female executives now lead some of the world’s most recognisable companies and institutions – Carol Bartz at Yahoo, Irene B. Rosenfeld at Kraft, Andrea Jung at Avon, and until recently Dame Clara Hurse at the London Stock Exchange. On the global political stage, we have female leaders in major markets – Germany, Argentina and Brazil.
When I was appointed in 2005, I was the only female chief executive of a top ten global accounting network and so I am often asked my views on gender in the accounting profession. At RSM International we have firms all over the world and in most countries, the sector continues to be dominated by men, in terms of numbers. In many large markets, over 50% of accounting recruits are women yet we are nowhere near 50% in terms of partners. Progress has certainly been made with regard to retention of women but more remains to be done.
Across all sectors, I believe there is no one-size-fits-all global solution. While quotas may work in some countries and sectors, others would benefit from more work in investigating retention rates and this is likely to include analysing perceptions and attitudes within companies towards women at the top. I have always said that in business, results matter and getting the right people, male or female, is more important than quotas. But perhaps a little encouragement, like those being explored through the Lord Davies inquiry, would go a long way in driving change.