22nd July 2011
The Financial Times (paywall) reports that the code was drawn up by 19 executive search firms and was published on Friday in response to a government-backed review by Lord Davies aimed at boosting the number of female directors.
When he announced his review Lord Davies set a September deadline to announce targets to increase the number of women on boards. Anglo-American, National Grid and Aviva are among the companies that have taken a lead, according to members of Lord Davies's steering group.
Since his report, 30 per cent of FTSE 100 board appointments this year have been female – more than double the previous rate – according to Cranfield School of Management.
People Management explained that the headhunters' code includes a requirement that in most cases 30 per cent of candidates on any initial ‘longlist’ drawn up by the recruiter should be female.
Search firms will be also expected to raise the issue of gender composition of the board at an early stage in any brief, to give the right support to candidates who are breaking through the glass ceiling and to work with company chairman and their committees to identify succession plans.
The code applies to search firms working with the FTSE 350.
Lord Davies welcomed the code: “By implementing these principles and working with FTSE 350 chairs and boards, the headhunter community will help to bring more talented women to the top table, improving board effectiveness in the UK.”
The Economist website comments that despite representing more than half the population only 15% of board members at big American firms, and 10% in Europe were women.
"This represents a squandered opportunity" it says "Companies that fish in only half of the talent pool will lose out to those that cast their net more widely. There is also evidence that mixed boards make better decisions than monolithically male ones do. When a board includes a variety of viewpoints and attitudes, the boss’s bad ideas are more likely to be challenged
Many European countries are also passing laws that would force companies to promote more women to the executive suite. A new French law requires listed firms to reserve 40% of board seats for women by 2017. Norway and Spain have similar laws; Germany is considering one.
The European Parliament declared this month that such quotas should be applied throughout the EU. Viviane Reding, the EU’s justice commissioner, says she wants European boards to be 30% female by 2015 and 40% by 2020.
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