Wednesday, 24 August 2011

Gender Diversity on Boards - the drive continues...

Lots on gender diversity this week, which I keep a watching brief on for obvious corporate governance purposes as well as impact on the post-Solvency II board, bearing in mind the Level 3 guidance on System of Governance in the area of "collective knowledge, competence and experience of the management body" (Guideline 12).

The Guardian highlighted progress towards Lord Davies recommendations (where the 6 month "ticker" has almost "tocked"), and flagged that there is some rather specious cramming of female non-execs since February to get the numbers up (only 1 executive appointment since Feb!). Interestingly, the responses sent to the FRC on adding a piece into the Corporate Governance Code on promoting diversity have been mostly in favour.

Looks like the 25% target could be a while away yet, and may be against the spirit of Lord Davies intent if completed by using the Non-Executive tactic.

The FT also flagged up a drive in Norway to extend the 40% female quota past listed entities and on to large unlisted companies (where it currently stands at 17% in the numbers quoted). The positive criteria cited made me chortle with my own inadequacy, namely that female board candidates;
  • Are younger and better educated
  • Are less risk prone (NB as a risk professional I have no idea what to think of this "trait")
  • Are not as driven by high salaries and bonuses
  • Generate deeper and broader discussion 
Evidence cited below this argues against, whilst highlighting that it is a fait accompli when considering the political persuasion of the current government.

Staying in Scandinavia, I checked out the recently revised corporate governance code in Denmark. Whilst they have a number of pieces on board "diversity", its benefits, and recommendations on regular reporting on diversity, they also slip in a clause (4.1.4) recommending the board discuss annually their activities to "ensure diversity at management levels, including equal opportunities for both sexes", as well as recommending that "measurable objectives" be set to this respect and publicly commented on.

Further comment gets to the heart of the recommendation by using the proportion of women at specific management levels as an example - they could just put the quota in and be done with it!

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