Appoint more women to the boardroom, industry told

Former trade minister Lord Davies of Abersoch said UK-listed companies in the FTSE 100 should have a minimum of 25% female board member representation by 2015.

Companies should set targets for 2013 and 2015 to ensure that more talented and gifted women can get into the top jobs in companies across the UK, said the report.

Lord Davies also called on chairmen to announce these goals in the next six months and chief executives to review the percentage of women they aim to have on their executive committees in 2013 and 2015.

But he stopped short of calling for quotas to be introduced unless the voluntary measures failed, after finding a lack of support for the measure during his review.

"Over the past 25 years, the number of women in full-time employment has increased by more than a third and there have been many steps towards gender equality in the workplace, with flexible working and the Equal Pay Act. However, there is still a long way to go," said Lord Davies today.

"Currently 18 FTSE 100 companies have no female directors at all and nearly half of all FTSE 250 companies do not have a woman in the boardroom.

"Radical change is needed in the mindset of the business community if we are to implement the scale of change that is needed.

"This is not about aiming for a specific figure and is not just about promoting equal opportunities but it is about improving business performance.

"There is growing evidence to show that diverse boards are better boards, delivering financial out-performance and stock market growth."

The former minister said there had been a huge amount of interest in his review, which he hoped would mark the beginning of a "step change" so that more talented women got seats on boards.

The report urged the Financial Reporting Council to amend the UK Corporate Governance Code to require listed companies to establish a policy concerning boardroom diversity.

Lord Davies also recommended that investors should pay close attention to its recommendations when considering reappointments to a company board and that firms should periodically advertise non-executive board positions to encourage greater diversity in applications.

Head-hunting firms were pressed to draw up a voluntary code of practice addressing gender diversity in relation to board level appointments to FTSE 350 companies.

Lord Davies said research from Cranfield University had highlighted a lack of female directors in Britain's top businesses, with women making up only 12.5% of directors in the FTSE 100 companies in 2010.

The FTSE 250 companies have an even lower proportion of female directors at 7.8%, and nearly half of them do not have any women in the boardroom.

Helen Alexander, president of the CBI, said the review had been "wise" to avoid quotas, which she believed would not have addressed the real issue of how to bring about a cultural change.

"The lack of women at board level needs addressing urgently, and the best way of achieving this is through companies reporting on their progress.

"We believe firms should report against internally-set targets that reflect different starting points, the nature of particular sectors, and the size and structure of the board.

"Lord Davies's report rightly proposes that chairs of FTSE 350 companies should set the percentage of women they aspire to have on their boards, based on the characteristics of their business.

"A Government-set target for FTSE 100 directors would not reflect the different circumstances of individual companies. It should be for companies, not the Government, to set an appropriate target."