Womenon Boards

The Davies Report :how the landscape

has changed sixmonths on

1 WOMEN ON BOARDS

Gender balance in the boardroom – and the wider question of promoting women intosenior executive roles – has continued to make the headlines since the Davies Report waspublished in February this year. The debate that has followed has raised many issues,demonstrating there are no simple answers to the underlying causes, or even agreementas to what those causes are.

What is clear is that there is no shortage of qualified women keen and able to take uppositions on boards – fourteen of the 21 appointments of women directors to FTSE 100boards in the last six months have been appointments of women with no prior FTSE 100or FTSE 250 board experience. That begins to meet a major objective of the Davis Report -that new talent pools should be explored by chairmen and nomination committees whenappointing non-executive directors.

Pinsent Masons has continued its focus on these issues and in this report we look at five

areas –

• What companies have said and done in the last six months - the Cranfield Report intoprogress on the Davies recommendations

• The UK Corporate Governance Cose: the impact of the Davies Report - changes to theCode to implement the Davies recommendations

• Diversity disclosures: changes to the Companies Act - what will have to be disclosedfrom 2012 onwards

• The role of the Non-executive Director and the FSA - a focus on NEDs and the meritsof diversity

• Mentoring and Sponsorship - what’s involved and what each can achieve

Please do get in touch if you would like to attend future events, or share your thoughtsand experiences on Women on Boards and achieving gender diversity in the boardroom.

Martin Webster

Head of Corporate Governance

martin.webster@pinsentmasons.com

Women on Boards The Davies Report – 6 months on -what has been achieved?

Martin WebsterPartner

“With women making up 60% of graduates coming out of ouruniversities, there are compelling business reasons for companies to

engage in this debate. Experience in Europe suggests thatlegislation will follow if companies do not themselves address the

issue of gender diversity in the boardroom.”

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Lord Davies gave FTSE 350 companies sixmonths to announce the number of womendirectors they are aiming to have by 2013and 2015. Cranfield School of Managementundertook to monitor the announcementsand reactions from those companies andtheir report, published in mid-October,makes interesting reading.

The figures

The headline figures have been wellreported: the percentage of women on FTSE100 boards has grown to 14.2%, thoughonly 22.5% of all appointments since 1 March 2011 were women, compared to the33% Davies called for. In all, there havebeen 21 appointments of women directorssince Davies published his report.

In the FTSE 250 the position was worse, withonly 18% of all new board appointmentsbeing women, giving a total of 8.9% womendirectors. 28 women were appointed toFTSE 250 boards since 1 March.

More encouraging for Davies is the newsthat all-male boards are now a minority inthe FTSE 250 (while 14 companies in theFTSE 100 have no women).

The importance of targets

Much of the media focus may have been onthese numbers, but the Cranfield reportsuggests that the 25% by 2015 target set byDavies is not necessarily sacrosanct.

More important is for a company to decideits own target, the timeframe within whichit can reasonably expect to achieve it, andto measure and report on progress towardsthat goal. A company starting this processwith an all male board will have a greatertask than others and may legitimately setitself a target below 25%.

An example of a company which adoptedthis approach – but it was the only one –was Senior plc from the FTSE 250, whichcurrently has no women directors and setitself a target of 15% by 2015. Far fromcriticising this response as falling short,Cranfield hold it up as an example of arealistic approach which meets theintention behind Davies.

Equally, companies which already havegood female representation might beexpected to aim higher. Davies wanted tosee FTSE 100 chairmen aspire to at least25% female representation by 2015 andCranfield note that only five companieswere ambitious enough to name a 30%target. As 27 already have at least 20%women directors, the researchers label this response as disappointing. It may also not be enough to satisfy the European Commission which has calledfor publicly listed companies to commit to 30% women directors by 2015 and 40% by 2020.

Warm words on diversity might bewelcome, the report suggests, but mayachieve little unless supported by

What companies havesaid and done in thelast six months There is still a long way to go and too many companies fail to recognisethe potential of women in leadership positions. We remain optimistic,however, that the voluntary approach... will deliver the necessarychanges... The best and most forward-thinking businesses are alreadyputting in place innovative solutions to help women succeed in theworkplace

Government Foreword to Women on Boards, 6 month Monitoring Report, October 2011

“The aim of targetsis for companies

to self-determinewhat is

reasonablyachievable within

a giventimeframe, from

a given startingpoint, and to hold

themselvesaccountable for

their statedgoals.”

Women on Boards,6 month

Monitoring Report,October 2011

3 WOMEN ON BOARDS

measurable targets and clear reporting onprogress. Cranfield conclude that anabsence of these elements "suggests thatwhile some companies might have thepositive intent of addressing the issue ofgender diversity on their boards, they maylack a credible strategy for doing so".

The changes in the UK CorporateGovernance Code reported in the nextsection are going to be a catalyst forchange in company reporting. Only 20%of FTSE 100 companies and 7% of the FTSE250 referred to gender diversity inreporting the work of their nominationcommittees.

The talent pool

One possible consequence of the Daviespush for more female appointments mightbe that the same women who already sit onFTSE 350 boards simply get more offers,rather than new women being recruited(some reports suggest this has happened inNorway, as a result of their 40% requirementfor women directors). Cranfield suggest thisrisk may have been avoided, with 14 of the21 new FTSE 100 appointments having noprior experience on a FTSE 350 board.

The research also looked at the backgroundof those women appointed to FTSE 100 boards and found that 57% had been infinance and 14% were from HR. A further14% had experience of senior operationalpositions. Finance and operational roles alsofeatured strongly in the FTSE 250.

Cranfield note that a common reasonoffered by some boards for a lack of seniorwomen is that their companies operate in amale dominated sector. The researchers’response is to point out that the FTSE 100companies that signed up to the 25%/2015 target include those operating inthe Mining, Oil & Gas, Automobiles,Engineering, Construction & Materials andAerospace and Defence sectors. See in

particular the example of BHP Billitondiscussed below.

Executive appointments

Of the 21 new women directors in the FTSE 100, three were executiveappointments. In the FTSE 250, two of the28 women who joined company boards didso in executive roles.

The Davies Report also looked at positions below board level, calling on chief executives to review the percentage of women they aim to have on theirexecutive committees in 2013 and 2015.Cranfield found only four companies in the FTSE 350 who responded. One of them was the mining giant Rio Tinto whodisclosed that they have 14% women insenior management and have set a target of 20% by 2015.

Indeed, Cranfield found poor levels ofreporting on gender diversity below boardlevel. Only 28% of FTSE 100 companiesreported on the number of women in senior executive roles and that figure fell to10% for the FTSE 250. As we report below,these disclosures are due to becomecompulsory under changes to theCompanies Act due in October 2012.

Cranfield’s report contains a brief case study of BHP Billiton, the Anglo-Australianmining group, which currently has 10% ofsenior management jobs held by women. Inaddition to aiming for 25% womendirectors by 2013, they explain in theirannual report how each business within the group has been required to develop andimplement a diversity plan as part of itsperformance requirements, a factor thentaken into account in assessing bonusremuneration. Progress against measurableobjectives for the proportion of women insenior management, on the board and in the workforce as a whole is to be disclosedeach year.

Justine HowardLegal Director

“Doing nothing is no longer an option. Boards now need to set targetsand report on the progress which is being made against those targets.Companies which genuinely try to achieve their targets are unlikely tobe criticised if they fall short. Companies which do nothing could find

themselves being singled out for criticism.”

“It would appearthat it was

thosecompanies who

are already onthe journey

who werewilling to make

thecommitmentto a target. ”

Women on Boards,6 month

Monitoring Report,October 2011

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Adoption of the new Supporting Principle B.2 in2010, with its explicit reference to gender, was acontroversial move for some. With thesubsequent publication of the Davies Reportand its recommendations for further changes tothe Code, the Financial Reporting Council (whichhas responsibility for the Code) consulted onhow these might be achieved. Following thatconsultation, the FRC has announced that forfinancial years beginning on or after 1 October2012 two amendments will be made to theCode to support the Davies recommendations..

Diversity policy, measurableobjectives and disclosure onprogress

Code Provision B.2.4 already requires the annualreport of a premium listed company to describethe work of the board’s nomination committee,the process it uses for board appointments andan explanation if either the chairman or a non-executive director has been appointedwithout using head hunters or open advertising.The amended B.2.4 will add specificrequirements for disclosure on diversity –

A separate section of the annual report should... include a description of the board’s policy ondiversity, including gender, any measurableobjectives that it has set for implementing thepolicy, and progress on achieving the objectives.

There are two points here where the Codediverges from what Davies recommended. First,he asked boards to establish a policy on“boardroom diversity”, but made no specificreference to gender. The new language herefollows the formula used in the Code’s 2010change and refers to “diversity, including gender”.

Boards will need to talk about and disclosetheir policy, objectives and progress ondiversity in general - for example, in terms ofage, background, race and nationality - as wellas focussing in particular on gender diversity.

It will be up to each board to decide whichareas of diversity are relevant to it (the FRCdid not want to prescribe a list of every aspectto be covered) but gender was deemed worthyof special mention because a lack of womenaround the boardroom table runs the risk of“group think”, as well as suggesting that thetalent pool of eligible women is not being fullyexploited. In addition, the FRC suggests theremay be a poor understanding of women ascustomers and employees and littleencouragement for aspiring female executives.

The second subtle shift from the words used byDavies appears in the reference to “anymeasurable objectives”. Davies wanted anabsolute requirement that companies shouldset measurable objectives as part of theirdiversity policy, on the principle that what getsmeasured gets done. The FRC has taken theview that, if the policy is not to be restricted togender, it is unrealistic to expect companies tocome up with objectives for a range of diversityaspects, and it would be inconsistent to singleout gender. Instead, companies should be leftto decide what areas, if any, they think wouldbenefit from having a specific objective. If (asthe Cranfield research would suggest) manycompanies are unhappy with targets for womendirectors, they will be relieved that there is tobe no obligation to introduce them.

In any event, locating these requirements in aCode Provision means that companies are free toapply them on a “comply or explain” basis: they

The UK CorporateGovernance Code: theimpact of the DaviesReportThe search for board candidates should be conducted, andappointments made, on merit, against objective criteria and with dueregard for the benefits of diversity on the board, including gender.

Supporting Principle B.2 UK Corporate Governance Code

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can disclose a diversity policy and measurableobjectives and their progress in achieving them,or they can explain why they choose not tocomply with any or all of those elements.

The ability to explain non-compliance will notalways be an easy option. A credible explanationwill be difficult if the board has not evenconsidered its approach to diversity. A numberof institutional investors have expressed aninterest in what companies are doing ondiversity and are likely to challenge poorreasoning. The EU is also keen for regulatoryintervention where the quality of explanation isunconvincing.

Board evaluations and genderdiversity

The FRC takes the view that diversity, andspecifically gender diversity, is a key element inensuring the effectiveness of a board. It follows,therefore, that the requirement in MainPrinciple B.6 –

The board should undertake a formal andrigorous annual evaluation of its ownperformance and that of its committees andindividual directors

should include a consideration of the make-upof the board in terms of gender diversity.

Board evaluations continue to be an area manycompanies struggle with. Whether they arepurely internal, whether external help is sought,the form they take and how they are reportedraise questions each year. The FRC has takenthis opportunity of putting a little flesh on thebare bones of Main Principle B.6 by adding anew Supporting Principle –

Evaluation of the board should consider thebalance of skills, experience, independence andknowledge of the company on the board, itsdiversity, including gender, how the board workstogether as a unit, and other factors relevant toits effectiveness

Note again the reference to “diversity, includinggender”, suggesting that other aspects ofdiversity may be relevant and need to beassessed. It is also worth remembering that a

Supporting Principle such as this carries nospecific requirement either to explain how itsterms have been applied (as there is with a MainPrinciple under the Listing Rules), nor to complyor explain as with the Code Provisions. ASupporting Principle just provides additionalguidance on what the Main Principle entails.

The FRC comments that the investors whoresponded to its consultation were strongly infavour of it, which mirrors recent calls frominvestors for increased transparency onboardroom evaluations.

What isn’t in the Code

No other changes to the Code are proposed.The 30% Club argued for a requirement to setand publish a target for women at seniormanagement level but, having declined to dothat for the board, the FRC also passed on thatmore ambitious request.

The consultation on Code changes also askedwhether more detail should be given as to whata boardroom diversity policy might contain.Answers for and against were evenly divided,and in response the FRC has confirmed that ithas no current intention of issuing furtherguidance on the topic, but will keep the pointunder review.

When will these changes takeeffect?

The October 2012 date for introducing thesechanges was chosen to coincide with otherexpected changes to the Code concerning auditcommittees and re-tendering for auditmandates, as well as new legislation expectedfrom the government requiring disclosures ongender diversity (see below). In the meantime,the FRC has followed Davies’s lead andcompanies are “strongly encouraged” to treatthese Code amendments as applying to earlieraccounting periods. For companies with aDecember or March year end, there maytherefore be some pressure to include thesedisclosures in annual reports for the currentaccounting periods, and certainly for thefollowing years to 31 December 2012 and 31March 2013.

Linda JonesPartner

“Davies wasn’t just looking at gender, but the benefits of diversity in allits forms, and the new Code will reflect that”.”

6WOMEN ON BOARDS

A further recommendation of the Davies Reportwas that listed companies should disclose theproportion of women directors and employeesin three areas:

the main board senior executive positions and the workforce as a whole.

In September the Government published aconsultation paper, The Future of NarrativeReporting, which proposes a major change tothe current form of narrative reporting in acompany’s Annual Report. The “front end”,currently comprising the Business Review andDirectors’ Report, is to be replaced by

a Strategic Report which will set out thecompany’s strategy and direction and thechallenges it faces, with high levelinformation on the company’s finances andremuneration, and

an Annual Directors’ Statement which willsupport the Strategic Report with moredetailed information set out in a prescribedlayout with standard headings.

As part of these changes, the Governmentproposes to include a requirement that theStrategic Report discloses each year theproportion of women in the three categoriesidentified by Davies. They recognise, however,

there is a potential difficulty in defining what isa “senior executive position” and have asked forviews on how this might be done. Whatever thedefinition, and regardless of how big or small theresulting group may be, the fact that it is aproportion or percentage figure that is asked forshould meet the Davies objective.

Disclosure of figures for the whole workforcemay also be difficult where there is no groupwide HR database, particularly for thosecompanies with overseas operations. Thesuggestion here is that disclosure is made forthose parts of the business where information isavailable, with an explanation of theapproximate proportion of the global workforcethe figures relate to. Companies should alsoname those countries and regions where genderinformation for their operations is not availableor difficult to obtain.

These changes are due to be made in time foraccounting years beginning on or after 1October 2012.

Diversity disclosures:changes to theCompanies Act

Helen RidgePartner

“The shake up in the format of the Annual Report scheduled fornext year is going to be a major exercise for many companies,

and gathering diversity statistics will be part of that.”

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The FSA’s focus on NEDs

Our ARROW visits now focus more on firm’sgovernance mechanisms and the role played bydirectors, especially NEDs.

FSA Policy Statement 10/15: Effective Corporate Governance

One result of the financial crisis has been arenewed focus by regulators on non-executivedirectors and what they have, or have not, beendoing. The Walker Review into corporategovernance at banks and other large financialinstitutions identified failings in their challengeand oversight role. As a result, the FinancialServices Authority has developed a new topicfor its periodic inspections, as evidenced by theabove quotation.

There is no comprehensive definition of the roleof the NED in the FSA’s Handbook and soconcepts are freely borrowed from the UKCorporate Governance Code developed by theFinancial Reporting Council, a quite separatebody. (For more on what the Code says on therole of the NED, click here.) The drawback of thisapproach is that some of these borrowings maymiss the point that much of the detail of theCode is not obligatory but rather to be appliedon a comply or explain basis. If an FSA regulatedfirm believes that a particular Code Provision isnot appropriate for the way it organises itselfand that an aim of the Code can be bestachieved by another route, it should be free toexplain and follow that alternative.

There is, however, some guidance in the FSA’sFit and Proper Test for Approved Persons on thekey competencies they would expect from anon-executive director at a regulated firm –

market knowledge an understanding of the business’s strategy

and business model risk management and control financial analysis and control

governance, oversight and control the appropriate regulatory framework and

requirements.

The FSA does not expect every non-executive topossess all of these qualities, but each needs tobe represented on a board. More particularly,not everyone needs to be an industry specialist.What is required is that there is a balance ofskills and knowledge across all board membersand that each NED possesses a number of theserelevant skills. Any shortcomings in terms ofspecialist knowledge of the industry can beaddressed by a tailored induction and acontinuing training programme. The FSA takesthe view that the most effective inductionsinclude NEDs spending time in the business andmeeting people below board level. To reinforcethe point that lack of industry expertise is notfatal, the regulator is on record as saying –

Having a structured [induction] plan can give a firmthe confidence to appoint non-financial specialists.

Governance in retail firms – feedback from Winter 2010 seminars

All directors of FSA regulated firms need to beapproved by the Authority and, as part of itsnew more intrusive regime of regulation, it willinterview those proposed for board positions inthe biggest companies and where concerns havebeen raised in smaller firms. Such sessions arerigorous and need detailed preparation by theindividual in conjunction with the company andits advisers, though the proposed director mustattend the interview alone. Some have resultedin the FSA indicating that approval is unlikelyand the candidate has withdrawn as a result.

This initial interview is not the end of theapproval process. NEDs need to be able todemonstrate their credentials on an on-goingbasis. The FSA is interested in regular reviews ofthe effectiveness of individual directors, theboard and its committees, though, in contrastwith the UK Corporate Governance Code, thereis no preference for externally facilitatedevaluations over internal reviews, saying each is“equally valuable”.

The role of the Non -Executive Director andthe FSA

8WOMEN ON BOARDS

The FSA and diversity

Given the FSA’s interest in good governance, theeffectiveness of boards and the quality ofnonexecutive directors, one might have thoughtthey would have a view on diversity. If they do,it seems at best luke warm –

While the FSA does not have a specific equality anddiversity objective or have targets for the number ofwomen or other groups being authorised to carry outSignificant Influence Function roles, we arepermitted ... to monitor which groups arerepresented among those individuals we approveand to act as advocates for equality and diversitygenerally within the firms that we regulate.

FSA Policy Statement 10/15: Effective CorporateGovernance

The conflict the regulator faces stems from theemphasis in the Walker Review and elsewhereon competency and a thorough understandingof a firm’s business. To paraphrase crudely:better to be safe with a board of white, Anglo-Saxon males in late middle age who havespecific industry expertise, than be sorry with aboard, diverse in terms of gender, age andbackground, but with some members lackingthat comprehensive sectoral experience.

The FSA recognises the dangers of thisapproach. In the same policy statement quotedabove, it said –

Our focus on individuals’ experience andqualifications could increase the conformity andhomogeneity of those at the top of the UK financialservices industry, with the risk that levels of challengeand alternative points of view are reduced....

Indeed they share the FRC’s views on thebenefits of diversity –

Having a more diverse board may help deliver betterregulatory outcomes, as increased diversity producesa wider range of perspectives, thought andapproaches to solving regulatory problems and canhelp avoid the danger of “group think”.

FSA response to EU Commission green paper:Corporate Governance in Financial Institutionsand Remuneration Policies, 31 August 2010

The FSA has nonetheless put itself on record, inits response to the same EU green paper, asopposing quotas which “could raise the risk thatpeople are appointed just to fulfil the quota,rather than because they have the rightqualities needed by that board at that time”.

The FSA’s view that diversity brings manybenefits was certainly shared by others during apanel discussion at a Pinsent Masons seminar inearly October. Women are seen as more likely tochallenge, to ask the penetrating question, andless likely to accept the status quo. And yet, inan area where risk management is critical, thefinancial services sector is particularly short ofwomen in senior leadership roles. The moreforensic, more persistent, approach displayed bymany women, should be a key attribute for theboards of FSA regulated entities.

There is, of course, a balance to be struckbetween, on the one hand, challengingcolleagues and questioning received opinionand, on the other, risking the collegiality andunity of a board. One tip offered at the seminarsuggested that a sole woman newly appointedto a board should find an ally amongst her malecolleagues, someone who might also look at theworld differently and be prepared to back her upin the points she makes, or at least to warnfrom experience when another course of actionmight achieve better results.

In any event, diversity on a board is about morethan gender, and diversity at the top of abusiness can be a sign of health and strength.That point led to a question from the floor: wasa macho, winner-takes-all culture at certainbanks the root cause of the financial crisis? Itcan’t be denied that most CEOs are men and arelikely to have displayed macho traits in theirrise to the top. But tempting as such an easyanalysis might be, the reality is more likely to befound in a wide variety of behavioural andeconomic factors.

Tim DolanPartner

“Despite some of its more positive statements, it seems theregulator is unlikely to be telling boards they should be

improving their governance by appointing more womennonexecutive directors.”

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At our seminar in early October, we invitedGillian Wilmot, Anne Boden and MargaretYoung, three women who have achieved seniorpositions in financial services, to discuss the rolethat mentoring and sponsorship can play andhow to tap into that expertise.

Mentoring

Mentoring is the transfer of skills andknowledge from a highly experienced leaderwho has faced similar challenges to a lessexperienced individual wanting to progress intheir career. The mentee learns from thementor’s successes and mistakes, and receivestrusted, confidential advice on meeting thechallenges they encounter and achieving theirobjectives. The mentor provides encouragement,urges persistence and gives reassurance that thementee has the qualities to succeed.

Mentoring needs to be distinguished fromcoaching. A coach teaches specific skills butmay not have personal experience of the roleconcerned. Mentoring can be a much moreinformal arrangement, comprising regularconversations, swapping of experiences and theoccasional warning or word of caution. Much ofa mentor’s role may consist of listening to thementee talk about the issues they face, theirambitions and the route they have planned toachieve their aims. That will trigger advice fromthe mentor’s own career, along withobservations from having faced similarsituations. Such a relationship will develop well

if the two parties feel comfortable with eachother and there is a free exchange of ideas.

Alternatively, there may be a more formalframework to a mentoring relationship, with thetwo parties agreeing a set of expectations andobjectives and a defined timeframe. Whichevermodel is chosen, it has to be bespoke anddesigned specifically for the needs of theindividual mentee. No one solution will suit allneeds. Indeed, rather than stick with one longterm appointment, a change of mentor can bebeneficial as the mentee develops and newchallenges are faced.

Internal or external

Should a mentor be internal, an insider at thesame organisation as the mentee, or is it betterto find someone external who can take a moreobjective view? As well as empathising with thementee, a mentor will ideally understand theorganisation concerned, the way it works, thepersonalities involved, its own ambitions andthe way they are to be achieved, and that maybest be done by an internal appointment.Keeping things in-house will also minimiseissues with sharing information which might beprice-sensitive or at least confidential to thebusiness (though an external mentor will alsobe bound by confidentiality and expect to signan agreement to that effect). An internalmentor can also act as a sponsor for thementee.

Mentoring andSponsorship

Gillian WilmotBoard Mentoring

"Companies serve their customers and stakeholders bestwhen the leadership team is diverse and where there is

diversity of thinking."

One obstacle to greater diversity in the boardroom is that manywomen do not have access to the role models and champions requiredto succeed at a more senior level.

10WOMEN ON BOARDS

But there are drawbacks. Internal appointmentsmay be more informal and less structured, withthe mentor struggling to find the time neededto devote to the role (attending master classesin effective mentoring can pay real dividends foran internal mentor). They may also lack outsideexperience and independence and be too closeto the organisation concerned to take a trulyobjective view. At worst, they may have theirown agenda and interests which can conflictwith those of the mentee.

Sponsorship

Having a sponsor, someone who speaks up foryou, puts your name forward and recommendsyour advancement, is important for all, bothmen and women. The problem is that most ofus tend to recruit and promote in our ownimage and, when faced with alternatives, wefollow the easy route of choosing someone likeus. If the majority of senior roles are held bymen, there is a risk they will sponsor more menlike them and the benefits of diversity are lost.Older men can, in any event, be understandablywary of being seen to sponsor younger women,for fear of the innuendo which may follow. Andwithout a sponsor, an individuals’ progresswithin an organisation can be all the moredifficult.

It is one of the attributes of a good leader thatthey spot tomorrow’s stars early, bring peopleon and promote their cause. Most sponsors willbe internal and are key when seeking toprogress in the same organisation, but a highprofile backer from outside can be equallyinfluential when applying for external roles.Anyone giving a reference is, one hopes, aneffective sponsor.

A sponsor need not be a mentor – the formerpromotes the individual to the powers that be,while the latter advises and encourages theindividual direct, as discussed above. But aninternal mentor may broaden the role to act asa sponsor as well. Discussions with the menteemay bring out more fully the qualities theindividual possesses and spur the mentor toshare their knowledge of new talent withothers. If an organisation puts in place aninternal mentoring programme, with seniorindividuals pairing up with more juniorexecutives, talent spotting is bound to result,with the best being fast tracked for earlypromotion.

Our Panel

Gillian Wilmot - founder ofBoardMentoring.com and currently a nonexecutive director at Pockit.com and a chair inthe public sector; formerly a director at Next,Royal Mail and Admiral Group.

Anne Boden – former chair, Royal Bank ofScotland EMEA board for Global TransactionServices; previously Chief Information Officerand board member at Aon Limited; currently amember of the Board of Governors at MiddlesexUniversity.

Margaret Young – chairman at Cattles andWelcome Financial Services (formerly executivechairman for a two year period of operationaland financial restructuring); previously seniorindependent director at Unigate and supervisoryboard member at Royal Numico NV.

11 WOMEN ON BOARDS

What the Code says

The UK Corporate Governance Code highlightsthe two main features of the role:

constructive challenge help in developing stratergy

Main Principle A.4

Note the qualifications in each case: challengeshould be constructive and designed to advancethe debate rather than challenge just for thesake of it; and the role of the non-executivedirectors in strategy is to assist the chiefexecutive and senior management in theirdeveloping of a plan, rather than to claim it astheir sole preserve.

Read further into the Code and other roles areassigned to the non-executives on the boardacross a range of governance issues –

scrutinising the performance ofmanagement

monitoring reporting of the company’sperformance

being satisfied as to the integrity of financialinformation

being satisfied that financial controls andsystems of risk management are robust anddefensible

deciding appropriate levels of remunerationfor executive directors

a prime role in appointing and removingexecutive directors

a prime role in succession planning

understanding the views of majorshareholders.

More is said on each of these points in MartinWebster’s User’s Guide to the UK CorporateGovernance Code which can be downloadedwithout charge from our website atwww.pinsentmasons.com.

UK Corporate Governance Code

The Role of the Non-Executive Director -UK CorporateGovernance code

Appendix

Useful links

Board Mentoringwww.boardmentoring.com

Corporate HeartCorporate Heart is a Performance Consultancy which primarily works by developing people toenhance results. Pauline Crawford, CEO and her team provide new perspectives on humaninteraction in business, designed to build sustainable growth, success and capability. Their latestresearch addresses “What men think about women at work” www.corporateheart.co.uk

Cranfield monitoring report

Downing Street press releasehttp://www.number10.gov.uk/news/pm-welcomes-progress-on-women-on-boards/

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