The Equality and Human Rights Commission recently published the results of its first in-depth study into the recruitment of non-executive directors by headhunters. One of the key findings of the research was that “the Board appointment process remains opaque and subjective, and typically driven by a corporate elite of predominantly male Chairman who tend to favour those with similar characteristics to themselves.”
Although there has been a slight increase in the percentage of women on boards, it has been forecasted that females will account for just 18% of board members by 2013. The Davies report published last year recommended that percentage should be 20% next year and 25% by 2015.
The EU justice minister, Viviane Reding, has gone a step further and called for a mandatory 30% female board representation by 2015, and 40% by the end of this decade.However, is thought that Vince Cable will reject the plan for quotas, stressing that the UK has been increasing female board representation since it implemented its voluntary system after the Davies review in February 2011.
The report also noted that more women candidates are getting onto the long list, but when it comes to drawing up the final shortlist, the ability of a candidate to “fit” into boardroom culture still appears to be one of the principle deciding factors.
There’s no doubt that there are plenty of suitably qualified female candidates. One firm of headhunters questioned during the course of the research said it had a database of 150 suitably qualified women who were ready to step into a boardroom role.
Research shows that companies with a healthy female board representation outperform their rivals with a 66% higher return on invested capital, 53% higher return on equity and a 42% higher return in sales.
The challenge for HR is to help promote female board membership. HR departments should be devising sustainable solutions and long-term strategic practices to help improve business performance and these should include bridging the gender diversity gap in the boardroom.
Has your company taken steps to improve female board representation since the Davies review last year? And what can HR departments do to encourage male dominated boards to hire members on merit rather than “fit”?