Review urges headhunters’ code rethink to boost female directors

Headhunters and executive search firms should put at least one strongly recommended woman on all shortlists for boardroom roles, an expert has advised the government.

The call is part of a review of the Voluntary Code of Conduct for search firms, which is being conducted by Charlotte Sweeney, formerly the head of diversity at bank Nomura International.

The review, which has been submitted to Business Secretary Vince Cable, said that search firms could do more to help their clients reach diversity and equality targets.

Sweeney said that search firms are not doing enough to ensure more women reach top positions.

As well as putting forward more female candidates, Sweeney called for headhunters to look beyond the minimum standards set out in the code, and start sharing statistics on gender balance ratios at all stages of the recruitment process with the government at least.

She said all employers’ financial reporting councils should highlight their knowledge of the code with search firms they using, so headhunters are aware they take it seriously. Sweeney also challenged the firms to include compliance with the code in their contracts with search firms.

Speaking about the role search consultants play, Sweeney said: “Throughout my review there was a clear, articulated commitment from the majority of search firms to support the creation of more diverse and balanced boards.”

But, she added: “Examples where the commitment was transferring into consistent and sustainable action was mixed. Further transparency across the industry will help identify where any further barriers are and inform where focused action is required.”

Cable said he supports the review’s recommendations. He said: “The headhunting community is a crucial catalyst to introducing more capable women in the boardroom. But, they can often be one of the first hurdles talented, board-ready women face when trying to reach the top, so I welcome any efforts to improve the transparency of the industry.”

As well as targeting search firms, Sweeney recommended that a database of ‘board-ready’ women should be created, led by Lord Davies – who is due to publish his annual report – Women on Boards – later this month.

Sweeney’s review has already received the backing of groups including Women on Boards as well as the Recruitment and Employment Confederation (REC).

A separate report by the REC – called Room at the Top: women leaders and the role of executive search’ – supported the idea that headhunters should publish data of the proportion of women on long and short-lists for senior and board-level positions.

REC chief executive Kevin Green said: “The UK has an abysmally low ratio of women to men in board rooms and executive teams despite the fact that balanced boards better represent customers and stakeholders, make better decisions and have been proved to deliver better financial results.

“Our industry needs to work together with business and government to spread best practice and drive progress towards achieving the goal of 25 per cent female board representation by 2015.”

Women on Boards chief executive Denise Wilson said: “Many search firms have already stepped up to the plate and are visibly supporting chairman and board-ready women in the journey to achieve gender parity. But, many are well placed to up their game and we need to see more consistent action from all 70 search firms signed up to the code. Better balanced boards bring real business benefits.”

In 2011 Lord Davies’ review of women at the top recommended all FTSE 100 companies should aim for at least 25 per cent female boardroom representation by 2015. 

Today women comprise 20.4 per cent of FTSE 100 boards, up from 12.5 per cent when the review was first published.