Codes of Practice and Accreditation Process revised in July 2014 taking into account the recommendations made following an independent review undertaken by Charlotte Sweeney Associates that tested the integrity of the Voluntary Code of Conduct and its impact. The Code was drawn up by the executive search community in 2011 in response to the recommendations of the Davies Review and aimed to establish best practice in gender diversity at board level, recognising the important role executive search firms play in supporting their clients as they take steps to improve the gender balance on their boards.
- Search Firms should, in collaboration with their clients, discuss each woman on the long-list and aim to have at least one woman whom they would ‘strongly recommend’ the client should meet and put forward onto the shortlist of all executive searches for board positions.
- The code, as it stands, should be considered to be the minimum standard and, as with the original code, search firms should work together and articulate the requirements of an upper tier to the code including how assessment should be made as to whom should become part of a ‘supergroup’.
- Throughout the interviews there were numerous discussions relating to what happens at each stage of the search and hiring process e.g. long-list, short-list and hire. Search firms should be encouraged to capture this information and to share their statistics with Government as and when requested.
- Through the analysis of the search firms websites only 25% stated their commitment to the voluntary code, which is the final provision. Only 12% shared any data to show their success rates of hiring women to board positions.
a. Search firms should be more overt on their websites, marketing literature and when talking to clients about their commitment to the code.
b. Search firms should be encouraged to share their hiring data as well as some narrative and case studies of successes.
- Search firms are ultimately there to deliver the requirements of their clients. To this end all FTSE 350 companies should challenge the search firms further to deliver against the codes provisions. Companies should include a statement in all search contracts or agreements clearly articulating they will comply with all aspects of the voluntary code and explain if unable to do so.
- Some stakeholders continue to argue there are an insufficient number of ‘board ready’ women out there with the required skills for a FTSE 350 role. To support achieving the 2015 target a database of women with the skills to take a FTSE 350 board position should be created. The database creation should be led by the Lord Davies Steering Group and would be in addition, and complimentary, to what is already available with the aim of connecting board chairs with talented women.
- Through the interviews a small number of the more enlightened Investors were actively asking FTSE organisations what they were doing to create more gender diversity within the board and to comply with the aspirations of the Lord Davies review. However, a number of the investors may well have limited knowledge about diversity and what good looks like. a. The Investor community should play a more active role on this agenda and challenge businesses further on their plans and actions to create more gender balanced boardsb.
- The Lord Davies Steering Group should create information for the investor community on why gender diversity is important on corporate boards, including the right questions to ask, what they should be looking for and what a good response sounds like. 8. Throughout the interviews there were a number of discussions regarding the 30% long list and ‘women only shortlists’. There have been differing legal opinions as to the ability to request ‘women only shortlists’ as an appropriate means to redress the balance on boards. The Equalities and Human Rights Commission (EHRC) should create the appropriate guidance required.
- There is limited visibility of the code and those interviewed found it difficult to find the code or details of the signatory search firms. To ensure this has clear prominence a section within the Government (BIS) website should be created to publish the code, the signatories and case studies of how the code is working in practice. 10.
- The FRC UK Corporate Governance Code stipulates “the search for board candidates should be conducted, and appointments made, on merit, against objective criteria and with due regard for the benefits of diversity on the board, including gender”. The Voluntary Code for Executive Search should be referenced on the FRC website and within the FRCGuidance on Board Effectiveness when it is next updated.