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by Aman Singh Das | February 25, 2011


That's the reality that is driving Britain's latest appeal to the private and public sectors: Increase female participation on boards to promote business development.

In a government-commissioned report, new guidelines urge the country's largest companies to aim for a minimum of 25 percent female representation on their boards. But the report, according to the New York Times, stops short of recommending a Norway-like quota system.

"Under the guidelines, companies would have to announce to shareholders by September their own targets for placing women on their boards, and state clearly how they plan to do so," reports the Times.

The report, authored by former trade minister and former chairman of the British bank Standard Chartered Lord Mervyn Davies, also asks companies to "regularly report the numbers of women sitting on their boards and the numbers of women in senior positions."

Realizing a growing gender disparity among top leadership, Norway passed a law in 2003 that stipulated at least 40 percent of every publicly-traded company's board be comprised of females.

The results have been mixed, so far: While there has been a spike in female representation and a reduction in the age of the average director, it has been accompanied by stagnating growth and a drop in management experience levels.

Britain isn't the only country to follow Norway in sounding the alarm.

Since Norway passed the law, several European countries have passed similar regulations, including France (40 percent in the next six years) earlier this year and Spain in 2007.

While the Davies report stops short of suggesting a quota, its findings offer a telling insight into the lack of gender equality in Britain: 18 of the top 100 U.K.-based companies have no female directors; almost half of the companies on the FTSE 250 index have no women on their boards.

Further, according to the Times:

In the European Union, 9.7 percent of the board members at the top 300 companies were women in 2008, according to the European Professional Women's Network. In the United States, roughly 15 percent of the board members of the Fortune 500 companies are women.In China and India, they hold about 5 percent of board seats.

Quota or no quota, the issue of female representation in the C-suite remains very real. And there are numerous surveys that consistently point to the lag.

For example, a 2009 Executive Leadership Council survey concluded that African-American women face serious challenges if they want that CEO chair. And a Center for Work-Life Policy report earlier this year determined that women continue to face a very resolute glass ceiling because of a lack of sponsorship from the top (Why Most Qualified Women Don't Make it Senior Leadership).

And there is an alternative view to the issue as well, succinctly put by Julia Finch in the U.K newspaper Guardian. According to Finch, women executives themselves are not doing enough to help other women follow in their footsteps. She writes:

"It is not a case of pulling up the drawbridge to stop other women following: they won't lower it, either, for those following behind, and help correct a situation that is clearly wrong.

For Finch, the blame also extends to headhunters:

"Headhunters, whose senior ranks are full of women, are equally to blame. Why don't they look beyond the usual suspects, or are they too busy kowtowing to the chairmen paying their fees?"

While Finch's argument might sound like an unsubstantiated rant, the issue of women sponsorship and a corporate culture that encourages equal representation among leadership ranks is indisputable.

In retrospect, what I wrote on CNBC in March 2009 remains just as relevant today:

"Maybe choosing candidates for the corner office solely on qualifications and "strategic networks" isn't helping us make good decisions in corporate America. Maybe the realization that a diverse group of executives results in better-rounded judgment calls and ultimately the route our economy takes is a question that must be raised in the CEO office"

New York Times


Filed Under: CSR