David Cameron’s latest exhortation on more inclusiveness in diversity in UK’s corporate board rooms – “that companies could be forced to appoint more women to their boards” sounds more like a veiled ultimatum. In his statement at the Northern Future Forum in Stockholm, he argued that “businesses are “failing” the economy by not having enough females in senior positions.” The Northern Future Forum, which ended on 9th February, 2012 at Stockholm had the Prime Ministers of the Nordic and Baltic countries as well as United Kingdom meet to discuss future challenges of our societies with representatives of the business community and public life.
One of the two core topics of discussion this year was “how to get more women to start their own businesses and take on leading positions in companies,” the other being “how to make older people stay longer in the working force.” He has even announced a new provision in the UK corporate governance code that will come into force requiring companies to report on their policy, delivery and progress on boardroom diversity, in October of this year.
“Women now make up nearly half the workforce across Europe and the majority of university degrees, but they are still not sufficiently represented at the senior boardroom level,” Cameron said in a statement before the meeting. “The evidence is that there is a positive link between women in leadership and business performance, so if we fail to unlock the potential of women in the labor market, we’re not only failing those individuals, we’re failing our whole economy.”
According to the submission released by UK at the Northern Future Forum in Stockholm, in the current status, if women’s entrepreneurship reached the same levels as the US, there would be 600,000 extra women owned businesses, contributing an extra £42billion to the economy.
The UK Government presently is also working towards implementing the Mervyn Davis Report that recommends increasing the number of women on boards. According to last year’s report , women constitute only 12.5% of the FSTE 100 boards, and it was estimated, that at that current rate of change, it would take over 70 years to achieve a balanced parity, according to the government. Women now account for 15% of directors of companies in the FTSE-100 index, up from 12.5% last year; and all-male boards in the FTSE, have dropped from 21 last year to 10 at present. It was only in November 2011 that Theresa May, Britian’s equalities minister announced the recruitment of 5,000 business mentors to guide and inspire female entrepreneurs.
“As a government, we want the UK to be the best place in the world to start and grow a business, and for the next decade to be the most entrepreneurial and dynamic in Britain’s history – women can be at the heart of that,” according a report in the Financial Times, UK. Quota systems, if implemented, always run the risk of overriding genuine talent and experience, which with proper nurturing and encouragement yields much better financial results and corporate performance graphs.
Whether these “Policy ideas” (that were announced at the Forum) would convert to “Official hard Policy” remains to be seen.