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Ramsha Khan reviews the context of the current Women on Boards debate. This topic will feature in the May 2023 Legal Women magazine with the most recent statistics, comments, and interviews with experienced non-executive directors.
Women are underrepresented on company boards around the world. According to the World Bank, women held only 15.2% of board seats and 9.7% of executive committee positions in 2018. The United States ranked in the middle at 15.8% of board seats and 11.1% of executive committee positions. Europe had the highest proportion of women representation on boards, with 24.8% of board seats and 15.6% of executive committee positions held by women.
It matters that women are underrepresented because it leads to a lack of diversity in decision-making. This can lead to decisions that are not reflective of the population, especially in relation to issues such as pay, working hours, and policies. This lack of representation can have a negative impact on the company.
The May Legal Women magazine will feature the issue on representation of women on company boards at both executive and non-executive levels in the UK. This is widely recognised as a major issue in the business world.
Reports such as The Davies Review (2011) have investigated the representation of women on corporate boards in the FTSE 100 companies in the UK. The review found that only 12.5% of board positions were held by women in 2011, and recommended that the target for women’s representation be increased to 25% by 2015. The review also recommended that each FTSE 100 company should have at least one woman on its board, and that the government should introduce legislative measures to ensure that companies comply with this target. After five years, the review found that the target had been exceeded, with women making up 26.1% of board positions in 2015. The review also noted that there had been a significant increase in the number of women appointed to executive and non-executive director positions, and a shift in public opinion towards gender diversity in the boardroom. Furthermore, the review highlighted the importance of continued focus on gender diversity in the boardroom and suggested that the government should introduce additional measures to encourage more women to join boards.
To address the issues relating to representation of women on boards, the UK government has implemented initiatives such as the UK Corporate Governance Code, which requires companies to have at least one woman on their board and to take active steps to increase their representation of women in senior management positions. Additionally, there are organizations such as the 30% Club, which is an organization dedicated to achieving gender balance in business. This organization has been successful in increasing the representation of women in FTSE 100 companies from 12.5% in 2011 to 33.6% in 2020.
Progress was shown in the period 2005-2016 evidenced in the report ‘’Women in the Boardroom: A Global Perspective, 2019’’. More recent reports also show interesting changes and in the LW May edition, we will highlight the latest figures and ask Tamara Box, one of the founders of the 30% Club, whether it should be renamed to the 50% Club!
May 2023
Sources:
- World Bank, "Women on Boards and Executive Positions in the Corporate Sector (2018)," https://data.worldbank.org/indicator/SL.TLF.EXEC.ZS?locations=US-EU-World
- BBC News. (2020). Women on boards: A slow and steady climb to 30%. Retrieved from https://www.bbc.com/news/business-48481376
- The Guardian. (2020). UK Corporate Governance Code. Retrieved from https://www.theguardian.com/business/corporate-governance-code
- 30% Club. (2020). About Us. Retrieved from https://30percentclub.org/about-us/