Watch London Finance Sector: Slowdown in Female Non-Exec Appointments
Vince Cable sends warning over slowdown in appointments of female board members to UK companies as first described by Elizabeth Rigby, FT. Top British businesses are at risk of failure to meet a voluntary quota for increasing the percentage of females on boards; they must boost their efforts or face legal consequences, according to Vince Cable, the British Secretary of State for Business, Innovation and Skills.
Mr. Cable informed Members of Parliament on the European Select Committee that their goal of having women make up 25 per cent of board members by the year’s end has begun to stagnate over the past several months.
In a letter to committee chair Sir William Cash, Mr. Cable wrote, “British companies are unable to afford such complacency and the alarm should be heard loud and clear by individuals who are failing to do their part in helping us achieve this goal.”
“We need to increase our efforts to promote a well-balanced corporate environment and keep the European Union from instituting legal quotas that no British company needs or wants.”
This admonition comes following indications of a slowdown in the appointment of female board members last fall, when the percentage of women in new positions fell to just under 32 per cent in the six months to October, from just over 35 per cent in the six months prior.
The target goal of 25 per cent had been set in a government-assigned report in 2011 by Lord Davies, the former Minister of Trade, in an attempt to avoid the possibility of quotas being enacted by the European Union.
Due to this voluntary goal, the number of women serving on boardroom positions throughout the United Kingdom since 2010 has nearly doubled, reaching 23 per cent in October of last year. All blue-chip businesses in Britain now have female representatives in boardrooms after Glencore, the last all-male group of directors in the FTSE 100, made a woman a non-executive director the previous summer.
However, the image is more uncertain with FTSE 250 businesses, where there were still 28 all-male boards as of last October. Females made up just over 17 per cent of NEDs in these medium-sized businesses.
The discrepancy between males and females is even more noticeable in the context of executive directors, which is less encouraging still. Women in the FTSE 100 hold a mere 8.4 per cent of these positions, compared to 5.5 per cent as of 2011. There are only five FTSE 100 businesses with women serving as chief executives.
In London’s financial sector, leading women have demanded quotas for promoting female executives to resolve the gender gap amidst evidence showing that the number of women serving as senior managers in London has stayed under 20 per cent.