Cable tells FTSE 100: get more women in the boardroom
As mining giant Randgold Resources brings in Jeanine Lioko as a non-executive director, business secretary Vince Cable has written to the last seven firms without a woman on the board, telling them ‘doing nothing is not an option’.
While Cable acknowledges the progress that has been made over the last two years, with the number of all-male boards in the FTSE 100 falling from 21 in 2010 to the remaining seven, he says that Britain should ‘not have a single FTSE 100 board without a significant female presence’ by 2015.
Writing to the chairmen and CEOs at each of the remaining companies – Antofagasta, Croda, Glencore, Xstrata, Kazakhmys, Melrose and Vedanta – Cable asks them to explain what steps they have already taken to diversify their boards and how they plan to bring in more women in the future.
The EU has proposed a 40 percent target for female board members, though it will not impose mandatory quotas. The UK, which favors a target at a national rather than European level, aims to have 25 percent female representation on FTSE 100 boards by 2015.
Cable says the call for more women is less about equality and more about good governance and good business. ‘Businesses should be making sure they have the right people around their top table,’ he writes. ‘The international evidence supports this… Diverse boards are better boards benefiting from fresh perspectives, opinions and new ideas, which ultimately serve the company’s long term interests.’
He recognizes, however, that some businesses – such as mining and the extractives industry in particular, which make up five of the seven remaining all-male boards – face some ‘unique challenges in diversifying their boards with the right experience’.
Kazakhmys says this has been a factor in diversifying its board, though it adds that 21 percent of its management is female. ‘We are aware that we do not have any women on our board’, but the company must focus on ‘professional need and merit’ first, explains a spokesperson. ‘We look for directors who have extensive experience that is directly relevant to our business and our obligation must be to select the best candidates.’
Xstrata, which is due to complete a merger with Glencore in the coming weeks, explains that its unique position means it will no longer have a board, pending competition clearance from China. Alison Flynn, spokesperson for the company, adds that Xstrata has attempted to diversity top spots in the past – offering a board position to a woman in 2010, only for her to take a post elsewhere.
Glencore also says it had previously identified a number of potential candidates for a non-executive position, but the search was put on hold due to the merger. The search for a female board director is a ‘significant consideration and will be an important area of focus for the new nominations committee,’ says a company spokesperson.
While Cable notes ‘the frequent travel and project based work in remote areas of the world have all been cited as barriers to appointing more women in the past… successful modern companies learn to adapt and survive and doing nothing is not an option anymore’.