The UK Government supports the European Commission's decision not to impose mandatory quotas; it favours a self-regulatory national level approach. In February 2011 the Davies Review of "Women on Boards" was published; the key recommendation was a target for FTSE 100 companies of a minimum of 25% female representation on boards by 2015. Annual reports are issued, tracking progress against the recommendations in the Review. The current figure for women on boards in the FTSE 100 stands at 20.4%.
One of the initiatives from the Davies Review was a voluntary code of conduct for executive search firms, setting out minimum diversity requirements for headhunters and aiming to increase the number of women on boards. A report published last week on the progress of the voluntary code calls for greater transparency in the recruitment industry and for executive search firms to publish data on the number of women put forward for board roles.
The Charlotte Sweeney report's recommendations include:
- headhunters should commit to putting forward at least one strongly recommended woman on the shortlist submitted to Chairs for all board positions
asking the Equalities and Human Rights Commission to draw up guidance for the headhunting industry on the legality of women only shortlists
- creating a database of "board ready" women
- companies should challenge search firms to include in their contract that they will comply with the code.
The prospect of all-women shortlists has attracted comment, not least because the Government's Business Secretary Vince Cable has been quoted as saying he is in favour of them. But there is some concern as to how these might fit with the rules on positive discrimination. Under UK law, only a limited form of "positive action" is permitted. (These are voluntary provisions and an employer is not required to take positive action.) An employer can assist those with protected characteristics to overcome disadvantages connected with the characteristic (such as providing training designed to help women enter or progress within an organisation) if certain conditions are met. Employers can also treat candidates with a protected characteristic (including gender) more favourably in recruitment or promotion decisions if they are "as qualified" for the job as other candidates, subject to conditions including not having a policy of treating people with a protected characteristic more favourably.
Following up another of the recommendations in the Davies Review, the Government last year amended the regulations on directors' reporting to require quoted companies to produce a strategic review as part of their annual report. The new rules include a requirement for quoted companies to report on:
- the number of men and women on their board of directors
- how many male and female "managers" (defined as employees who have responsibility for planning, directing and controlling the company's activities) there are; and
- the male/female split of employees in the company.
Companies have to comply with the new rules for annual report years ending after October 2013.