Headhunter Reforms To Boost Female Board Appointments
Ways to improve the transparency of the headhunting process for board appointments have been put to government as part of an independent review to increase the number of women on British boards.
Charlotte Sweeney, asked by Business Secretary Vince Cable to review the executive search firms’ Voluntary Code of Conduct in September 2013, published her report on 4 March 2014. The Code lays out steps for search firms to follow across the search process, from accepting a brief through to final induction. Ms Sweeney was asked to look at the Code’s effectiveness since it was introduced in 2011 and to make recommendations to strengthen it further.
This comes as the FTSE100 nears the target, set by Lord Davies in his Women on Boards review of 2011, of achieving 25% of women in boardroom positions by 2015. The current figure for the FTSE100 stands at 20.4%.
Ms Sweeney’s review made 10 recommendations, of which the main ones were that:
• headhunters should commit to putting forward at least one strongly recommended woman on the shortlist submitted to chairs for all board positions
• the Equalities and Human Rights Commission should create guidance for the headhunting industry on the legality of women only shortlists
• search firms should look to go beyond the minimum standards set out in the Code and should share their statistics on the male/female candidate ratio during the various recruitment stages with government. This will enable government to assess how successfully the firms are in delivering on the commitments of the Code of Conduct
• a database of ‘board ready’ women should be created, led by Lord Davies’ steering group, and shared with other stakeholders such as companies, investor groups and the 30% Club
• the firms, government and Financial Reporting Council should all raise awareness about the existence of the Code. Companies should also challenge search firms to include in their contract that they will comply with the Code.
Mr Cable said: “The headhunting community is a crucial catalyst to introduce more capable women in the boardroom. However, they can often be one of the first hurdles that talented, board-ready women face when trying to reach the top, so I welcome any efforts to improve the transparency of the industry.”
Ms 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. However, examples where the commitment was transferring into consistent and sustainable action were mixed. Further transparency across the industry will help identify where any further barriers are and inform where focused action is required.”
Chief Executive of the Women on Boards review Denise Wilson commented: “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 in British boardrooms. However, 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.”
Chief Executive of the Recruitment and Employment Confederation Kevin Green said: “The best search firms know it’s their responsibility to challenge and probe employers’ assumptions so they ensure businesses are not missing out on top female talent.
“We propose that executive search firms publish the proportion of women on the long and shortlists for board and senior management positions, as well as data about positions that are filled by women. This openness and transparency will highlight the positive role of headhunters in helping companies secure the talent they need to improve performance.”
Ms Sweeney was previously international head of diversity and inclusion for Nomura International PLC. During the course of her review she interviewed key stakeholders, including chairs, board consultants, female directors, investors, HR directors, company secretaries and other interested parties to get a better picture of the compliance of the Code.
Lord Davies will publish his annual report on Women on Boards later in March. The latest figures for the FTSE100 show that women account for 20.4% of all board positions - up from 12.5% in February 2011.
search-consult is published by Dillistone Systems, supplier of FileFinder Executive Search software. Dillistone Systems is part of Dillistone Group Plc, as are Voyager Recruitment Software and FCP Internet, supplier of the Evolve Recruitment Software SaaS system.