Vince Cable has sounded a warning to the last seven companies in the FTSE 100 (FTSE: ^FTSE - news) that do not have a single woman on their boards to take urgent action to address the gender imbalance.
The Business Secretary has written to the chief executive and chairman of each of the businesses, which include five mining specialists - Xstrata (Other OTC: XSRAF - news) , Glencore, Kazakhmys (LSE: KAZ.L - news) , Vedanta and Antofagasta (LSE: ANTO.L - news) - to tell them that “doing nothing is not an option anymore”. The remaining two businesses singled out by Mr Cable were Melrose, the engineering group which specialises in acquiring and turning around struggling companies, and chemicals manufacturer Croda.
Every FTSE 100 board should have a “significant” female presence by 2015, Mr Cable said, in a move which he argued would serve companies’ “long term interests”.
“Businesses should be making sure they have the right people around their top table. This is not about equality, this is about good governance and good business. The international evidence supports this: diverse boards are better boards benefiting from fresh perspectives, opinions and new ideas which ultimately serve the company’s long term interests,” he said.
Mr Cable conceded that it is harder for mining companies to find female directors with experience in the sector, not least because executives must spend a lot of time in remote areas overseas in order to rise up through the ranks. However, he said it was down to businesses to find ways around this.
“Successful modern companies learn to adapt and survive and doing nothing is not an option anymore. We’ve seen examples again today that this can be done and I am determined to see further action.”
Two and a half years ago, when the Coaltion began putting pressure on companies to address the issue, there were 21 FTSE 100 companies without a single female board member. Mining firm Randgold became the latest company to cross the divide yesterday, when it appointed former Citigroup (NYSE: C - news) manager Jeanine Mabunda Lioko as a non-executive director.
However, many companies have simply addressed the gender imbalance by appointing female non-executive directors, who wield less power on a day-to-day basis. Around 80pc of FTSE 100 boards still do not have any executive directors who are women.
At the same time, there has also been a sharp decline in the number of female chief executives. There will soon be just two women running FTSE 100 companies - Angela Ahrendts at Burberry and Alison Cooper at Imperial Tobacco - following Dame Marjorie Scardino’s exit from Pearson (NYSE: PSO - news) at the end of 2012 and Cynthia Carroll’s planned depature from Anglo American (LSE: AAL.L - news) later this year. There is just one female chairman: Alison Carnwath at property developer Land Securities (LSE: LAND.L - news) .
Dame Marjorie, who made history as the first female leader of a FTSE 100 company, has spoken of her regret that more women haven’t followed suit. “I thought in 1997 that by the time I left Pearson things would be different...It’s not too different and for that I’m sorry,” she said.
One of the problems is that women are often appointed to deal with “basket case” sitiations, where there is an inherently high risk of failure, Christine Lagarde, the managing director of the International Monetary Fund, argued last week in Davos. “Women generally get the job when it’s … a basket case, a lost cause - and they turn it around,” she said.