Will WOBs be the new WAGs?

Lord Davies of Abersoch, a former banking executive, made a number of practical recommendations as a means of improving the number of Women On Boards (“WOBs”).

Last year the Business Secretary, Vince Cable, and the Minister for Women and Equalities, Teresa May, commissioned the report recently published by Lord Davies on 24 February 2011.

The report put forward a series of recommendations which businesses should adopt over the coming years. However, if voluntary and significant change is not evident amongst these businesses, resulting in an uncorrected market, then the Government may step in and introduce statutory quotas – a measure initially rejected by Lord Davies.

The report included recommendations such as:

• FTSE 100 companies should aim for a minimum of 25% of female board representation by 2015,
• FTSE 350 companies should set their own targets for female board representation, and these targets to be disclosed within the next 6 months, with a view to achieving them by 2013 and 2015,
• Quoted companies will be required to disclose, annually, the proportion of women they have on their board, the number of women in senior executive positions in the company and the number of women employees who make up the whole of the organisation.

The Financial Reporting Council (“FRC”) intends on considering these recommendations, with a view to potentially implementing them through the UK Corporate Governance Code.

The estimated ‘deadline’ of 2015 may seem like a generous target to meet, the fact of the matter is that some of these quoted companies face significant obstacles. The Independent reported that 18 FTSE 100 companies have no female directors at all, and nearly half of all FTSE 250 companies do not have any WOBs at all.

Increasing amounts of published evidence suggests that women still face barriers to top-level promotion. The aim of Lord Davies’ report is to abolish those so-called glass ceilings and to consequently narrow the gap between the genders. Only time will tell whether these businesses are correcting the disparity in career prospects which women presently face.