Lord Davies and Women
- A very mixed response

8 months after the report, what progress has been made?

Back in February 2011, Lord Davies made recommendations which were greeted enthusiastically by the Government, academics, social commentators and parts of corporate UK.

His headline recommendations included that FTSE100 boards should aim for 25% female representation by 2015 and that all Chairmen of FTSE350 companies should set out the percentage of women that they aim to have on their boards in 2013 and 2015.

The report also set out guidance around the role that different parties can play to make this happen.

Eight months later, in October 2011...

Cranfield School of Management published a progress report supported by Lord Davies showing significant but rather inconsistent progress. Some organisations are whole heartedly embracing the changes whereas others seem to have ignored them completely.

The main developments reported by Cranfield are as follows:

• As at the date of the report, 61 of the FTSE 100 companies had responded to the Lord Davies review, acknowledging that gender diversity is an issue, but disappointingly, only 33 of these had heeded the recommendation to set themselves targets for the percentage of women they aim to have on their boards. And, of these, only ten had set themselves targets of greater than a 10% increase. Lloyds Banking Group and Rolls Royce stand out for boldly aiming to increase their female representation by 20-23%
• Amongst FTSE 100 companies, since February, 21 women have been appointed to board positions out of a possible 93, this represents  22.5%, some way short of the 33% recommended in the Davies report but still quite significant progress
• The number of women now holding FTSE 100 board directorships is 155 out of a total of 1,092 positions (14.2%). This is up from 12.5% in 2010
• As at the date of the report there were 14 all male boards within the FTSE 100 - down from 21 in 2010. By the start of this month this had decreased further to 12. Those still without women include Aggreko, Amec, Glencore International and Associated British Foods*
• FTSE 250 companies started from a lower base but have also made progress as a group. Women now make up 8.9% of FTSE 250 Directors - up from 7.8% in 2010 and, for the first time, it is a minority of FTSE 250 companies who have all-male boards
• One of the most encouraging signs is that there has been an increase in recruitment from non traditional sources so 67% of the FTSE 100 appointments and 72% of the FTSE 250 appointments have been women with no prior FTSE 100 or FTSE 250 experience. This opening up of the appointment process should pave the way for many more women who are able to do the job but have not necessarily followed the career paths traditionally trodden by male board members - a major factor affecting womens’ progress onto boards.

These figures all show that there is definitely movement in the right direction and probably much more than some dared hope back in February when the original report came out.

When looking underneath the headlines, it is clear to see that the improvements have undoubtedly been facilitated by the fulfilment of some other expectations set out by Lord Davies in his report.

The report's guidance

In particular, under the report's guidance, executive search companies have joined forces to develop a Voluntary Code of Conduct for head-hunters to increase numbers of female candidates put forward for board positions and to consider a wider pool of candidates.

And, after extensive consultation, The Financial Reporting Council has announced it will require listed companies to report annually on their boardroom diversity policy, including gender, and on any measurable objectives that the board has set for implementing the policy and the progress it had made in achieving the objectives. The FRC will also update the Code to include the diversity of the board, including gender, as one of the factors to be considered when evaluating its effectiveness. Some commentators consider this move by the FRC to be the one that will really get the laggards moving.

So, eight months in, whilst some fear the recent appointees are women who have been 'waiting in the wings' for some time and that the pipeline behind them is dry, Lord Davies and his team are holding firm on their requirements and timing. They are still hoping that a combination of pressure from the FRC, the media, shareholders and "increased government attention" will force companies to change without having to resort to compulsory quotas. One thing is for sure - that this will continue to be a hot topic for some time.

* A full list of the 12 all male boards is as follows: Aggreko plc,  Amec plc, Antofagasta plc, Associated British Foods plc, Essar Energy plc, Fresnillo plc, Glencore International plc, International Power plc, Kazakhmys plc, Randgold Resources plc, Vedanta Resources plc and Xstrata plc.

Elizabeth Mohr is a consultant specialising in board appraisal, coaching and development. Elizabeth qualified and practiced as a corporate solicitor and worked as an investment manager with responsibility for ethical investments before gaining an MBA and moving to McKinsey & Co as a management consultant. Her clients have included start-ups through to FTSE 100 companies and she has worked with both public and private sector organisations.

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