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Vince Cable tells City: Put more women in the boardroom before we force you

Government issues warning as figures show a stall in the rate of female appointments

Andrew Grice
Tuesday 09 April 2013 21:27 BST
The Business Secretary says lack of progress makes it harder to resist EU pressure
The Business Secretary says lack of progress makes it harder to resist EU pressure (Getty Images)

Britain's top companies will be warned today that the Government may force them by law to appoint more women to their boardrooms after the number of new female directors being appointed stalled in the past six months.

Vince Cable, the Business Secretary, said some progress had been made in the past three years in breaking through the so-called glass ceiling but added: "The momentum appears to be slowing and there has been much less progress in executive appointments."

Mr Cable is writing to the 27 per cent of FTSE 250 firms with all-male boards warning them to speed up their appointment of women.

"This is not just about gender equality, but about improving the performance and productivity of companies," he says.

Government figures, published today, show that the proportion of women directors in FTSE 100 companies has risen from 10.5 per cent to 17.3 per cent since 2010.

However, a separate survey by the Cranfield School of Management found that progress in FTSE 100 companies has reached a plateau in the past six months

There are now 192 female directors out of 1,110 in the top 100 firms, and the proportion is lower among FTSE 250 companies – up from 6.7 per cent in 2010 to 13.2 per cent according to the government data.

Cranfield says the UK is on course to hit the Government's target of 25 per cent by 2015. But Britain, which favours a voluntary approach, is among the EU countries blocking a European Commission directive that would require firms to ensure that 40 per cent of their non-executive directors are women by 2020.

Mr Cable told the all-male boards: "I do not believe that EU legislation would help us achieve greater boardroom diversity, but it will be harder for us to enforce that case without progress here in the UK. I would ask that you redouble your efforts in overcoming the barriers that may hinder your progress towards achieving gender diversity within your boardroom."

Lord (Mervyn) Davies of Abersoch, Labour's former Trade minister and ex-chairman of Standard Chartered, who publishes his second progress report about women on boards for the Coalition today, said companies were making real efforts to find and appoint capable women. "We are now moving to a place where it is unacceptable for the voice of women to be absent from the boardroom," Lord Davies said. "We've come a long way over the last two years but we must not get complacent and take the foot off the gas. This has always been a business-led approach with the support of Government. If we are to fend off the prospect of quotas and regulation then business cannot rest on their laurels and think the job is done."

Maria Miller, the minister for Women and Equalities, said: "We are heading in the right direction when it comes to women's representation at senior levels. But there is much more work to do."

Sir Roger Carr, President of the Confederation of British Industry, said: "These figures show if we are to remove blockages in the pipeline of female talent development, business leaders must roll up their sleeves and redouble their efforts to improve recruitment, mentoring and succession planning. Tokenistic EU quotas will do nothing to address the root causes of this issue. It is critical we nurture a diverse talent base right from the bottom to the top of our companies."

Man's world: The mining industry

Of the six FTSE 100 companies that have no female representation, four are miners – and that number was five until copper digger Kazakhmys was relegated to the FTSE 250 last month.

At least until recently the mining world could have pointed to Cynthia Carroll of Anglo American as one of a handful of FTSE 100 female chief executives. Yet she left the position earlier this month, and was replaced by Mark Cutifani. It means there are now just three women bosses on the Footsie – Burberry's Angela Ahrendts, easyJet's Carolyn McCall and Imperial Tobacco's Alison Cooper.

Among the blue-chip miners still all-male are Glencore and Xstrata, two firms which, pending approval from China, will merge in a £56bn deal that is the biggest ever seen in the sector. Earlier this year Dr Susan Vinnicombe, a co-author of the Cranfield report, said they had "committed" to Lord Davies to adding a woman to their boardroom – once the merger is completed.

Glencore's chairman Simon Murray certainly has some making up to do on the subject. In 2011 he created a furore by telling the Telegraph that women, while "quite as intelligent as men … like bringing up their children and all sorts of other things."

Toby Green

'Bonus boom' for bosses as rail chiefs claim £600k

Company bosses have enjoyed a "bonus boom" which has boosted their pay by 15.8 per cent in the past year, according to a new study.

Average pay for a company chief executive stands at more than £215,000, compared with around £43,000 for a middle manager, research by the Chartered Institute of Management (CIM) revealed.

The survey of 43,000 executives in 180 organisations showed that chief executives' pay increased five times as much as that of the average executive in the past 12 months. The basic salary of chief executives rose by 1.8 per cent last year, but "leapt" to 15.8 per cent when bonuses were added.

The news came as Network Rail said four bosses have been awarded bonuses totalling more than £600,000. The payments, including £168,000 to finance director Patrick Butcher, come at a time when rail regulators have been critical of the company's performance.

Alan Jones

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