James Moore: Headhunters must do more to make boards diverse
One area where institutions are increasingly inclined to make their voices heard is on the vexed subject of boardroom diversity. Given the number of high-profile disasters presided over by largely monochrome male boards, it’s very much in their interests to do so.
Unfortunately, efforts to improve the situation have proved less than effective. The target of having women occupying 25 per cent of boardroom seats by 2015 set by the former Standard Chartered chief executive Lord Davies is not just unambitious. It’s unlikely to be met. The current figure for the FTSE 100 stands at just 20.4 per cent.
Which is why a report into the role of headhunters is timely. If you’re looking for reasons why progress has been so slow, they would be a good place to start, given the control they have assumed over the appointment process.
Sponsored by Vince Cable’s business department, the gist of it is that while headhunters have talked a good game, they aren’t delivering.
This is hardly surprising. The voluntary code they supposedly operate under is so weak it makes Lord Davies’ target look like the height of radicalism. The code calls on search firms to ensure 30 per cent of “long lists” for board-level positions are made up of women but it’s the short list that counts.
Given that a headhunter’s first interest is in retaining business, their natural inclination is to concentrate on the sort of people board-level directors are comfortable with. This basically means white men aged 50-plus who look and think like they do.
The report has some interesting ideas, such as calling for headhunters to commit to at least one strongly recommended woman on short lists for all board positions.
There’s even a suggestion of something more radical, with a request for guidance from the Equalities and Human Rights Commission on the creation of all-women short lists. It isn’t all that much of a stretch to move from there to quotas. More overt talk about that from Mr Cable might just concentrate minds.
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