By Max Clarke
Regulatory heavyweights, the Financial Reporting Council, are consulting on whether or not the government should pursue with the recommendations outlined in Lord Davies’ report on Women on Boards.
“Board diversity and effectiveness are closely linked. Diversity widens the perspectives brought to bear on decision-making, avoids too great a similarity of attitude and helps companies understand their customers and workforces. A board with too few women on it risks a weakness in at least one of these respects,” said the Council’s Chairman Baroness Hogg.
Among the recommendations outlined in the report are the implementation of a quota system, to which business groups are largely opposed.
Prominent business group, the CBI (Confederation of British Industry) have today commented on the Council’s consultation. Said CBI Director for Competitive Markets, Matthwe Fell:
“We have been calling for action to get more women on boards, and believe that encouraging companies to report on their progress is the best way to achieve this.
“In our submission to Lord Davies’ review we said firms should report against internally-set targets, which reflect their different circumstances. It is good news that the FRC is proposing to follow this approach.
“Given the slow progress on improving boardroom diversity, the FRC should implement changes to the Corporate Governance Code sooner rather than later.
“With this issue under the spotlight in Brussels, the UK Government must mount a strong case for a “comply or explain” approach to reporting, rather than imposed quotas, to promote diversity.”