Lobby group says changes should be made quickly, but rejects calls for quota system
The Confederation of British Industry (CBI), a business lobby group, has called on regulators to get on with changes to governance rules to raise the number of women on boards.
The CBI says failure to act now ‘could put firms at risk of government or EU-imposed quotas, which would be little more than tokenism’. The organization also says speedy changes would keep up the momentum in the push for more female board members.
The CBI’s comments come in a submission to the Financial Reporting Council (FRC), which is consulting on how companies should report on board diversity. The lobby group says companies should be required to report on a ‘comply or explain’ basis – meaning they either follow the advice of the code or explain why they have not.
Arguing against calls for a quota system, the CBI says firms should be allowed to set their own targets based on the make-up of their organizations.
‘The best way to get more women on boards is by giving companies the flexibility to set targets that reflect the realities of their businesses,’ comments Katja Hall, the CBI’s chief policy director, in a statement. ‘Given the scale of the challenge, the FRC should get on with revising the code as a matter of urgency.’
The consultation by the FRC was prompted by a government-commissioned report, which recommended that companies should be required to monitor and report on board diversity. The deadline for submissions is July 29.
