The aim of achieving gender parity in senior executive posts and in boardrooms has been rising up the agenda in recent years.
This laudable objective was given a boost when, in 2010, the government commissioned Lord Mervyn Davies to conduct a review into boardroom equality. In this endeavour, nobody can argue against the motives of equality advocates.
The methods, however, are very much up for debate.
There have long been suggestions that the government should impose quotas on companies, though the idea tends to draw criticism from across the spectrum. The Davies review, published last week, rightly shied away from the move, noting that the introduction of legally enforced quotas was unwarranted.
A separate report is now recommending a markedly different approach: that bonuses of City executives should be linked to targets for the number of women appointed to senior roles.
The Treasury-commissioned review will argue that remuneration packages of a firm’s executive team should be dependent on gender balance.
There has been significant progress without quotas. FTSE 100 companies managed to beat the target of appointing women to 25 per cent of board positions by the end of 2015. It’s now at 26.1 per cent. When this voluntary target was set four years ago, women occupied just 12.5 per cent of board positions.
While there’s certainly a long way to go, the question now is whether we allow the change to happen organically, praising companies that act and criticising those who don’t; or artificially, bribing executives and potentially undermining the success of the women who achieve senior positions.
Lord Davies’ report proposed that by 2020 at least a third of boardroom positions at the biggest companies in the country should be held by women. If we continue at the current rate, this will be easily reached.
Davies, who has long campaigned for equality in business, has commended the “near-revolution and profound culture change at the heart of British business.”
This approach, encouraging companies to promote equally, is working. At the same time it takes nothing away from the women who achieve that success.
Waving bonuses in front of senior executives to encourage them to appoint more women would undermine the commendable cultural changes that are now yielding results.