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Embargoed for 00.01 Monday 8th March 2010 Women on boards: Public want quicker pace of change

News Release issued by the COI News Distribution Service on 05 March 2010

Government calls on firms to report action taken.

Companies may be required to report on their progress to get more women into the boardroom, under proposals announced today. It comes as new research shows that sixty per cent of people think there are not enough women directors in big businesses.

The survey which has been commissioned by the Government Equalities Office for International Women’s Day shows that half believe there will be equal numbers of men and women directors within the next 20 years. However, the reality is that it will take 60 years for women to gain equal representation on the boards of the top 100 companies at the current rate of progress[1].

The Government has today asked the Financial Reporting Council to consider including a new principle in its code of conduct (UK Corporate Governance Code) to require firms to report on what they’re doing to increase the number of women in senior management positions. This builds on the Equality Bill which will allow firms to choose to use positive action to appoint more women to senior roles.

Other key findings from the survey include:

· A clear majority (80%) think a balanced senior management team will be better at understanding their customers.

· Nearly two thirds (61%) believe businesses are losing out on talent by having fewer women in senior roles.

· More than three quarters (78%) disagree that, because men have more experience in senior management than women, men are better at running companies.

· Nearly three quarters (72%) think it is important that women and men should have an equal say in the business decisions over how the British economy is run.

· More than half (55%) think both men and women should share decisions in the finance sector which affect the economy. Only 7% think decisions should be left just to men.

· 71% believe having more women on senior management teams will lead to more family friendly working practices.

· More than half (59%) think that having senior management teams of all one sex will be more likely to think in the same way (‘groupthink’) and so make poor decisions.

· Just under half (43%) think there should be an equal balance of both men and women in investment banking.

This morning the Prime Minister will be hosting a business breakfast at Downing Street with leading women in business, to mark International Women’s Day and to discuss the opportunities and challenges facing women's leadership in business and enterprise.

Prime Minister Gordon Brown said:

"We all recognise the value of strong role models for women in all walks of life – and there are many in politics, the arts, public services, sport and the third sector. But there are too few in Britain’s boardrooms. When more than half of graduates are women, it is completely unacceptable that some of our top 100 public companies have not a single woman on their boards - and that none at all have a majority of women on their boards.

"A new principle in the governance code on diversity would build on the provisions in the equality bill, which allow employers to take positive action when recruiting to balance their workforce.

"But if we do not see a dramatic change in the composition of company boards in the future, we will need to consider taking more serious action to ensure companies recruit from the diverse pool of exceptional talent we have in the UK.”

Harriet Harman, Minister Women and Equalities, said:

"Britain needs more women in the boardroom. This survey shows that the public want a quicker pace of change. Government is playing its part, but firms need to play their part to.

"Too many British boardrooms are still no-go areas for women. Women are important consumers and employees. We’ll never get a proper meritocracy or truly family-friendly workplaces from male dominated boards.

"Businesses that run on the basis of an old boy network and do not draw on the talents of all the population will not be the ones that flourish and prosper in the 21st century."

Lord Davies, Minister for Trade, Investment and Small Business, said:

"Company boards benefit greatly from the contribution women members bring. Companies who fail to grasp the growing economic power of women and rely on outdated business models are missing significant business opportunities.

"The days of male domination of business are long over. It is time for the boardrooms of Britain to be drawn from the wide pool of excellent talent we have available in the UK, or else businesses will lose out to foreign companies who are better attuned to new business opportunities."

Currently, only one in ten FTSE board directors are women, and 25 firms have no women on them at all[2].

Women continue to be under-represented at board level despite having the right education and experience they need to succeed, and are deterred from applying due to corporate boards being dominated by “old boys’ networks”. [3]

Steps the Government is taking to support women in business include:

· The Equality Bill will allow employers to use positive action to appoint more women to senior roles, if they want to, provided the candidates are equally suitable.

· The Government has asked the Financial Reporting Council to consider including a new principle in its code of conduct (UK Corporate Governance Code) to require firms to report on what they’re doing to get more women into their boardrooms. This would help diversify the talent pool available to business, which in turn can drive success and competitiveness, benefiting the wider UK economy as a whole.

· The Equality and Human Rights Commission is producing recommendations shortly on how to further tackle sex discrimination in the finance sector, following an inquiry last year that found only one tenth (11%) of senior managers were women.

· Last month, the Government launched a new Women’s Employment Strategy to work towards a fair and family friendly labour market, and signposting businesses to programmes, networks and services aimed at improving senior representation.

· In 2008 the Government and Opportunity Now identified 100 exemplar employers who have taken action to increase the number of women at senior levels.

· The Civil Service is also committed to increasing the representation of women in top jobs. There are currently a 1,500 women in the Senior Civil Service representing 35%, which is a doubling in the last ten years, and 28% of those are in Top Management Posts (Director and above), with seven female Permanent Secretaries. The Civil Service has set targets to achieve 39% for women in the SCS and 35% in top management by 2013 with a stretch to achieve by 2011.

MEDIA ENQUIRIES

Please contact the Government Equalities Office press office on 0207 276 1175 or out of hours 07500 816 959.

On the Financial Reporting Council and Regional Women’s Enterprise Champions, please contact BIS press office on 020 7215 5614.

NOTES FOR EDITORS · The Government Equalities Office is responsible for the Government’s overall strategy, legislation, and priorities on equality issues. The Office also has direct responsibility for policy on gender equality, sexual orientation, and for integrating work on race. The Prime Minister announced the establishment of the Government Equalities Office (GEO) in July 2007 and it became a Department in its own right in October 2007. It works to Ministers Harriet Harman, Maria Eagle, Vera Baird, and Michael Foster.

· The survey was commissioned by the Government Equalities Office and conducted by Ipsos MORI.

· Ipsos MORI interviewed a representative quota sample of 1,071 adults in Great Britain aged 16+. Interviews were conducted by telephone between 20-24 February 2010. Data are weighted to match the profile of the population. The full research report will be published on the GEO website on 11 March 2010: www.equalities.gov.uk

· International Women's Day (8 March 2010) is a global day celebrating the economic, political and social achievements of women past, present and future. It is an opportunity for organisations, individuals and Government to celebrate the progress made in the past 99 years since the first International Women's Day but also to look forward to the other important action that needs to take place to ensure the lives of women both in Britain and all around the world are improved.

· The Equality Bill will allow employers to choose to take positive action to appoint a person from an under-represented group, provided candidates are as qualified to do the job as each other, and so balance things out if they want to.

· The Financial Reporting Council is currently consulting on their code of conduct (UK Corporate Governance Code). As part of this consultation the Government has asked the FRC to consider including a new principle in its code of conduct to require firms to report on what they’re doing to increase the number of women directors in senior management positions.

[1] According to the Equality and Human Rights Commission

[2] Cranfield School of Management Female FTSE 100 Index 2009

[3] Cranfield School of Management. ‘Increasing diversity on public and private sector boards: Part 1 - How diverse are boards and why?’ commissioned by the Government Equalities Office, November 2009.

Contacts:

Government Equalities Office press office
Phone: 0207 276 0932
enquiries@coi.gsi.gov.uk