What gets measured gets done: setting targets for the number of women on boards
Helen Wells, Acting Director of Opportunity Now the gender campaign within Business in the Community welcomes the recommendations of Lord Davies:
“The recommendations within the Lord Davies Review should be welcomed for their pragmaticism. Increasing the diversity of UK boardrooms is something which delivers business success and commercial advantage. I believe that better balanced boards are better boards, full stop. Study after study proves that having a diverse mix of experiences and perspectives leads to better strategic decision making, increased innovation and better corporate governance. Diversity helps avoids the pitfalls of group-think and the excessive risk associated with “one dimensional thinking”. Evidence suggests that increasing the number of women on boards can contribute to higher return on equity and total return to shareholders. The business case is compelling, but there are still not enough women around UK board tables. Cranfield research highlighted that women make up only 12.5% of FTSE 100 boards, only 5.5% of executive directorships and that 21 of the top 100 companies have no women on their board at all.
The recommendations put emphasis on reporting the number of women on the board, women in the pipeline and women within the organisation as a whole. They also suggest that businesses should have measureable objectives and a plan of how to achieve their aspirational targets. Let’s be clear about this – increasing the number of women on FTSE 100 boards to 25% by 2015 means that of 1080 board positions an extra 135 need to go to women or put another way we need to recruit an extra 27 women each year.
This “target and plan” mechanism allows organisations to approach increasing the number of women on their boards in a way which is meaningful to their own business and provides a practical vehicle for change. These recommendations should not be confused with any type of quota, they are about companies setting their own targets and their own action plans to achieve them. We all know that what gets measured, gets done and setting a target and an action plan for increasing the number of women within UK boardrooms should be no different. Opportunity Now has championed the business case for increasing the number of women in leadership roles for the last 20 years and we are delighted that our tenacity has helped to ensure that this is becoming a mainstream business issue.”
The full recommendations from Lord Davies can be found here: http://www.bis.gov.uk/news/topstories/2011/Feb/women-on-boards