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UK boardrooms challenged over women

Thursday 24 February 2011 – by Andrew Hickley

The UK Financial Reporting Council has announced it will launch a consultation aiming to get more women on the boards of the country’s top companies.

The news follows the submission of a government commissioned report stating that all FTSE 100 companies should look to have at least a quarter of their boards represented by females by 2015.

Unveiled by Lord Davies of Abersoch today, the report calls for a “radical change” in the mindset of the business community, noting that 18 FTSE 100 companies currently have no female board representation.

As expected, the report advises against a minimum quota of women, instead recommending that firms conduct reviews into the gender levels of their boards.

This would involve making targets based on the representation of women throughout the company, with companies expected to reveal figures by September 2011.

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Calling for the FRC to amend the UK corporate governance code, it also says that listed companies should be required to establish a policy concerning boardroom diversity. This would include measurable objectives for implementing the policy, with disclosures made annually to summarise progress.

The FRC has responded by issuing a statement saying it will consult on whether changes to the governance code would be an appropriate means of achieving more diverse and more effective boards.

In a statement issued today, the standard setter said it will include recommendations by Lord Davies, who has previously served as minister of investment and is a former chief executive of Standard Chartered.

Commissioned by business secretary Vince Cable, the report received a total of 2,654 submissions.

The review has been welcomed by the Confederation of British Industry, which said that it highlighted the need to urgently address the lack of women at board level.

“The report contains good ideas to develop and sustain the talent pipeline to the boardroom, including harnessing the role of investors, executive search firms, and mentoring,” said CBI president Helen Alexander.

“The review has also been wise to avoid quotas, which would not have addressed the real issue of how we bring about a cultural change.”

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