Lord Davies, who today published his independent review into Women on Boards, stopped short of imposing quotas, but has urged FTSE 350 companies to set their own targets for female representation at board level, and to publicly report these targets. 

He recommends that UK listed companies in the FTSE 100 should be aiming for a minimum of 25% female board member representation by 2015 (and 20% in the next two years). That's more than double the number of women currently on boards. But he stopped short of imposing quotas, unless these voluntary measures fail.

On targets, Lord Davies has called on companies to adopt a "comply or explain" approach, which would encourage organisations to publish their own targets, and comply with them or explain to shareholders why they have not done so. The report also calls on The Financial Reporting Council to amend the UK Corporate Governance Code to require listed companies to have a strategy on boardroom diversity. This should include how they would implement such a strategy and a summary of progress made.

But is ‘no quotas’ a disappointment? Well I’m in two minds. Do we want a carrot or a stick approach? The ideal scenario in my view is for organisations to voluntarily strive to reach gender equality at board level because they know it makes business sense – rather than because they’ve been obliged to. But (as I explained in my previous post) quotas do accelerate cultural change and create quick results. However I wouldn’t want any woman to be accused of getting there just because of her gender. As CIMA’s Helen Weir, head of retail banking at Lloyds Banking Group, said: "Having a quota would be unfortunate. I would hate to feel I'd been hired to a board simply because of my gender, not on merit." 

I welcome Davies’ approach for voluntary targets as this will certainly make organisations think twice when they recruit for senior management posts. However, it is important to keep the option to legislate if organisations do not comply...and to follow through! However, I do wonder why he’s suggested a target of 25% of women on boards in the next four years, and not 30%, 35% or even 40% as in Norway? After all, women make up 45% of the UKs working population, make 70% of the purchasing decisions at home and account for 57% of first-degree graduates.

I also support that companies are required to report on their targets - openness on this issue is the way forward. Although I would like to see firms to go even further and publish average salaries by gender and level to start exposing salary differentials by gender.  

This report has certainly shone light on the important issue of female progression in the workplace, created healthy debate and encouraged openness about targets on the percentage of women on boards. I hope that the report will also raise awareness about the business case for having diverse senior management teams, and encourage voluntary action from non-FTSE companies.

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About CIMA's Women in Leadership campaign

CIMA’s women in leadership campaign supports the progression of our female members into senior roles and promotes the accounting profession to female students internationally. www.cimaglobal.com/women Read our thought leadership reports, case studies from leading CIMA women or join our exclusive women's network on CIMAsphere. The network offers a platform for female members and students to share tips on advancing their careers, seek advice, and network with peers. Log-in / join the network.