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Legislation and quotas still not best solution: ACCA

The Association of Chartered Certified Accountants (ACCA) has said the solution to a lack of female board roles at FTSE companies is not "necessarily legislation and quotas".

The ACCA comments come on the back of a recent report, The Female FTSE Report 2013, by the Cranfield School of Management, which found progress with the 'Women on Boards' agenda in the FTSE 100 has stalled in the past six months. The professional accounting body added despite initial improvements in the number of women on boards, the report's findings are "worrying".
However, the report does note that the UK is on target to meet Lord Davies' recommendation from his original report that the UK should have 25% women on FTSE 100 boards by 2015.

"A concerted effort by the professions and business leaders to find ways of ensuring women reach the positions they are more than capable of achieving must be found. A previous report from Cranfield School of Management and ACCA showed that a financial qualification or a background which demonstrates substantial financial acumen are seen as catalysts for women getting onto the boards of FTSE companies," a statement from ACCA said.

"Finance is the language of the boardroom and having the ability to communicate financial information establishes credibility and appears to validate women's suitability for consideration for a board appointment."

ACCA also called for the old adage of the 'it's not what you know but who you know' to be "removed once and for all".
"Failure to find ways of supporting and mentoring women with boardroom potential will inevitably mean that imposing quotas and targets on FTSE companies is the only option. Merit should be the driver for board membership," the body commented.

Women on Boards progress report
The UK's Lord Davies' second annual progress report into Women on Boards has also been issued today and found between 2008 and 2010; the number of women directors plateaued but stalled at less than a single percentage point rise year-on-year.
According to the report, since work began on this area, the percentage of female board appointments has increased by nearly 50%.

Other highlights from the report include:

  • women now account for 17.3% of all directorships in the FTSE 100, up from 10.5% in 2010, and for 13.2% of directorships on FTSE 250, up from in 6.7% in 2010;
  • there are currently 94 FTSE 100 boards with female representation, while there are 183 FTSE 250 boards with female representation;
  • there are now 192 women directors on FTSE 100 boards out of a total of 1,110; and,
  • for the second year running, all-male boards are in the minority among the FTSE 250 at 26.8%.

"Whilst the report shows diversity is improving among non-executives it is disappointing that the same cannot be said for executive roles," Institute of Chartered Accountant in England and Wales (ICAEW) head of corporate governance Jo Iwasaki said.

"The findings suggest more needs to be done to tackle this supply side issue. In particular companies need to get better at developing and mentoring women from within."

Iwasaki added it is disappointing that the report indicates companies are still "failing to set measurable targets in this area" but she hopes the UK's revised Corporate Governance Code, which came into effect in October 2012 and enhanced transparency around diversity policies, "will be a catalyst for positive change".

Related links
Cranfield School of Management: The Female FTSE Report 2013
Association of Chartered Certified Accountants
Women on Boards second annual progress report

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