By Max Clarke

Lord Davies’ much anticipated report, Women on Boards, was delivered today and has broadly been well received by business leaders and by government. The report recommends:

• Recognising the key role investors play in engagement with boards; they should play close attention to the recommendations from the report when considering re-appointments to a company board;

• companies should disclose information on the number of women sitting on their boards and working in their organisations, as well as the company’s appointment processes and how this addresses diversity;

• headhunting firms should draw up a voluntary code of practice addressing gender diversity in relation to board level appointments to FTSE 350 companies.

Commenting on the report are Business Secretary Vince Cable, Home Secretary and Minister for Women and Equality Theresa May, and Jackie Orme, Chief Executive at the Chartered Institute of Personnel and Development (CIPD).

Business Secretary Vince Cable said:

"I strongly welcome Lord Davies’ report and am committed to promoting gender equality on the boards of UK listed companies. We will therefore seriously consider its recommendations.

“The report is clear that a business-led approach is the best way to increase the number of women on company boards, and we will therefore engage with business in considering his recommendations. Likewise we encourage regulators, investors and executive search firms to take forward those recommendations that fall to them.”

Home Secretary and Minister for Women and Equality Theresa May said:

“Inclusive and diverse boards benefit from fresh perspectives, new ideas and broad experience. A company with a board that reflects the people it serves is better able to understand its customers, and there is growing evidence that companies with more women on their boards outperform their male-dominated rivals.

“Women make up more than half of the population, but account for just 12.5 per cent of FTSE 100 directors. Lord Davies’ report is an important step forward in understanding why this is and what can be done about it, and I shall be considering his findings very carefully.”

CIPD Chief Executive Jackie Orme said:

"We welcome Lord Davies' focus on a voluntary approach. His review marks the start of a process. It is the right start, but everyone involved in the governance of British firms now needs to step back and recognise that there needs to be a fundamental shift in established perceptions of what a great board member looks like. That is the only way we will ensure we get to and beyond the 20% target swiftly and in a sustainable way.

"That means far more than setting internal targets and filling them in a tick-box way. From my own experience in business, I know that a range of opinions, backgrounds and perspectives is always better than what is often referred to as 'group think'.

"But I also know that we face a challenge to some severely entrenched attitudes in many boardrooms. I was once told a startling story by a woman who, being interviewed for a non- executive director role at a FTSE 100 firm, was told: 'Don't worry; we're not interviewing you because you're a woman. We've already got one of those'.

It is precisely that kind of tokenism and numbers game we need to avoid.

"Meeting Lord Davies' objectives must be about more than skirts on seats. It needs to be about a concerted challenge, lead by chairs of boards and headhunters themselves, to the established views of the skillset, background and range of experiences that make great board members.

"That board members should be appointed on merit is a truism - but the definitions of what constitutes 'merit' have been allowed to become too comfortable and too static - to the detriment of corporate performance. We need to get better at drawing from non- traditional sources - and the benefits of that approach will extend far beyond getting more women in the room. It holds out the prospect of generating a vibrant new generation of board members, capable of challenging orthodoxy, banishing group think, and generating more sustainable growth for their firms.

"By seizing this opportunity to challenge established norms, we'll do so much more than just ensuring women are allowed to make up the numbers. Lord Davies has created a platform we can build on - but everyone involved in the governance of our biggest firms now needs to step up and play their part."