This morning the government published its second annual review on ‘Women on Boards’:
Soon after the Conservative-led coalition came to power in May 2010, David Cameron appointed the Labour peer Lord Davies of Abersoch to report on how (not whether) to increase female representation on boards. The resulting Davies Report (February 2011) was full of claims that increasing gender diversity in the boardroom (‘GDITB’) would lead to improved corporate financial performance, whilst providing not a shred of evidence for the claims. Campaign for Merit in Business (‘C4MB’) has since gathered overwhelming evidence to show that GDITB leads to declines in corporate financial performance. Our latest briefing paper on the matter:
C4MB has been very active in challenging the government over its GDITB initiative. Can we see any evidence of our impact, when we look at this latest report? In my initial review of the document I cannot see a single claim that GDITB will – or even may – result in improved corporate financial performance. This is a major about-turn, and is effectively an admission that GDITB is nothing more than a social engineering exercise. So has the government taken the logical next step, and withdrawn its threat of legislated gender quotas on boards? Of course not. On page 9 of the new report we find:
Enlightened companies really are grasping this issue and doing their utmost to change the face of British boardrooms. However, they are being let down by others who feel that they can ignore this issue. The time has come for them to realise that they can’t. This is not an issue that is going to go away. Our initial strategy recognised that all companies are different and gave them the freedom to tackle this issue in their own way, making the right decisions for their companies. We still feel that this is the right approach for UK business. However, there is a very real danger that those companies who refuse to act now, by failing to put in place targets and polices, will force the hand of Government into imposing burdensome regulation upon all businesses.
I see that among the signatories of this new report is Professor Susan Vinnicombe, who leads Cranfield International Centre for Women Leaders. She was also a signatory to the original Davies Report. Surely the good professor would claim a causal link between GDITB and improved corporate financial performance? Er, no. I refer you to her admission to a House of Lords inquiry in 2012: