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Liberal Democrats in Sevenoaks, Dartford and Gravesham

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Should businesses aim for a gender-balanced board of directors?

September 17, 2019 2:44 PM

Gareth in Sevenoaks High St

BlackRock Managing Director Michelle Edkins, says "Studies show that diverse groups take better decisions but tend to believe they could have taken even better ones … whereas homogeneous ones take poorer decisions but believe they have taken the best ones. Diverse boards are probably more complex to lead, but more effective at what they do."

The fact that more diverse boards do better lies behind the voluntary objective - agreed between business organisations and ministers - that women should be at least one third of the board and executive committees in FTSE 350 companies by the end of 2020. So far the top 100 companies have already achieved this, or will make it by next year.

But many of the next 250 companies look set to fail. Almost 100 of them have no women, or just one, on their boards. Stobart and Sports Direct are among the laggards.

All organisations work better with effective internal challenge at the top. Gender balance is one way of making sure this happens, and businesses ignore it at their peril. In Norway, France, and other countries this is set in law, and despite early protests the results are now understood to have helped everyone - customer, employees and shsareholders.

So should we set legally binding targets in Britain? If voluntary action doesn't work there's a strong case to say yes.

In our local councils gender balance is decided by voters. They seem to like it. The Liberal Democrat group on Sevenoaks Town Council is 62% women (5 out of 8). They ensure that the Council hits the targets. And it seems to be delivering the mix of collaboration and challenge essential for success.

Gareth Willis

Parliamentary Spokeman, Sevenoaks Liberal Democrats