UK Govt May Look At Quotas For Women Directors

"The U.K. government may enforce quotas to increase the number of women on the boards of listed companies if a better gender balance cannot be reached through less direct measures, according to the head of the government's inquiry into gender inequality in public companies.

Mervyn Davies, former U.K. Trade Minister and chairman of Standard Chartered PLC, told Dow Jones Newswires in an interview Friday that a quota system was a "last resort", but one that would be pursued if progress was not made.

'If it [gender equality on boards] is not going to change over a brief period then we will have to do quotas,' he said. 'The reality is we only have 12% of FTSE 100 board members who are women, and when you go to the FTSE 250 it falls to 7%.'

Davies, who was appointed last month to lead the inquiry, said Norway's experience of using a quota system would be closely examined. Since it was introduced in 2008, Norway's rules have required public companies allocate 40% of board seats to women or face possible closure and delisting from the Oslo Stock Exchange.

His comments develop those made in March by then Prime Minister Gordon Brown, who said that if there was not a dramatic change in the proportion of women on public boards the government would have to consider taking 'serious action.'

Davies said the reasons behind gender inequality in the boardroom were complex, but said there is already a large pool of women who would be ideal to hold board positions.

'Britain is full of female entrepreneurs, but you don't see many of them on the boards of big companies. Why is that?' Davies asked. 'The business case for diversity is clear. The big question is: How do we have a mindset change in Britain?'"