Threat of quotas reduces all-male boards in UK by third

ALL-MALE BOARDS of directors at major companies are shrinking in number following the threat of quotas, a report presented to British prime minister David Cameron has revealed.

The number of all-male boards in the FTSE 100 has dropped from 21 to 14 since the publication in February of the Davies review, which called on companies to meet a minimum target of 25 per cent female representation on their boards by 2015.

But the six-month monitoring report of the recommendations made by the Davies review has found that two-thirds of FTSE 100 companies are ignoring his call to set targets for the percentage of women they aim to have on their boards. Of the 33 that did set targets, Rolls Royce and Lloyds Banking Group were identified as the most ambitious, aiming to increase female representation by 20-23 per cent.

Lord Davies, the former chief executive and chairman of the bank Standard Chartered who served as a trade minister under Gordon Brown’s government, has described all-male boards as “crazy” and “bad business sense” and the phenomenon of placing just a single, “token” woman on boards as “a total joke”.

Some 14.2 per cent of FTSE 100 board seats are now held by women, up from 12.5 per cent last year. Since the publication of the Davies review, there have been 21 new female appointments to FTSE 100 board seats, accounting for 22.5 per cent of all appointments since March 1st. This falls “some way short” of the 33 per cent recommended in the Davies review, according to the monitoring report published yesterday by management specialists at Cranfield University. However, it marks an improvement on the hiring rate of 13 per cent of all board seats last year, suggesting that major listed companies are taking note of Lord Davies’s warning that if companies don’t take action on gender diversity themselves, he will advocate quotas as a last resort.

Speaking before an event held by the Board Diversity Initiative in Dublin this week, Lord Davies said the steering group that produced the report was “vehemently opposed” to quotas, describing them as an admittance of failure. “If you bring quotas in, then the reality of it is, you’ve failed. You’ve failed to self-govern,” he said.

“The challenge for Ireland is for you to get your act together,” Lord Davies added. “In the UK, we’ve taken bold moves. We’ve got the headhunters, the shareholders, the chairmen and the government involved, so there’s no hiding place. And if at the end you still haven’t done anything, then the media should name and shame the company.”

He said he was “pleased with the progress” in British boardrooms, but there was “still lots to be done”.

Research published in July by Vivienne Jupp and Anne-Marie Taylor from the Board Diversity Initiative found that 40 per cent of the 24 largest Irish plcs have no women on their boards, while a further 40 per cent have just one woman director. “In that situation, you’re an isolated voice,” said Ms Jupp, who is the new chairwoman of CIÉ and former managing partner of Accenture.

The issue of lack of diversity in boardrooms was raised at last month’s Ryanair agm when a shareholder asked the airline’s chief executive Michael O’Leary why there were no women on its board. Mr O’Leary replied that this was “a good question” and indicated that the board’s nomination committee was “looking into it”.

Ms Jupp, who favours quotas, said more women executives were coming round to the idea of quotas because they were frustrated with the glacially slow pace of change in boardroom culture.