Charlotte Sweeney, was previously International Head of Diversity and Inclusion for Nomura International PLC., was asked by Business Secretary Vince Cable to review the executive search firms’ Voluntary Code of Conduct late last year.
During the course of her review she interviewed and challenged key stakeholders including chairs, board consultants, female directors, investors, HR directors, company secretaries and other interested parties to get a better picture of the compliance of the Code.
The Code lays out steps for search firms to follow across the search process, from accepting a brief through to final induction. She was asked to look at the Code’s effectiveness since it was introduced in 2011, and to make recommendations to strengthen it further.
This comes as the FTSE100 nears the target, set by Lord Davies in his Women on Boards review of 2011, of achieving 25 per cent of women in boardroom positions by 2015. The current figure for the FTSE100 stands at 20.4 per cent.
Her review made 10 recommendations, of which the main ones were that:
Headhunters should commit to putting forward at least one strongly recommended woman on the shortlist submitted to Chairs for all board positions.
The Equalities and Human Rights Commission should create guidance for the headhunting industry on the legality of women only shortlists.
Search firms should look to go beyond the minimum standards set out in the Code and should share their statistics on the male/female candidate ratio during the various recruitment stages with Government. This will enable Government to assess how successfully the firms are in delivering on the commitments of the Code of Conduct.
A database of ‘board ready’ women should be created, led by Lord Davies’ steering group, and shared with other stakeholders such as companies, investor groups and the 30 per cent Club.
The firms, Government and Financial Reporting Council should all raise awareness about the existence of the Code. Companies should also challenge search firms to include in their contract that they will comply with the Code.
Business Secretary Vince Cable said: “The headhunting community is a crucial catalyst to introduce more capable women in the boardroom. However, they can often be one of the first hurdles that talented, board-ready women face when trying to reach the top, so I welcome any efforts to improve the transparency of the industry.”
Charlotte Sweeney said: “Throughout my review there was a clear, articulated commitment from the majority of search firms to support the creation of more diverse and balanced boards. However, examples where the commitment was transferring into consistent and sustainable action were mixed. Further transparency across the industry will help identify where any further barriers are and inform where focused action is required.”
Chief Executive of the Women on Boards review, Denise Wilson, said:
“Many search firms have already stepped up to the plate and are visibly supporting Chairman and board ready women in the journey to achieve gender parity in British boardrooms. However, many are well placed to “up their game’ and we need to see more consistent action from all 70 search firms signed up to the Code. Better balanced boards bring real business benefits.”
Lord Davies will publish his annual report on Women on Boards later in the month. The latest figures for the FTSE100 show that women account for 20.4 per cent of all board positions – up from 12.5 per cent in February 2011.
