As the Daily Telegraph reports of the much touted book by Matthew Hancock and Nadhim Zahawi:
Sanctions are also suggested against non-executive directors of failed companies. The authors also oppose non-executives at systemically-important banks having other board roles and also want the law changed so directors of financial institutions that require recourse to public funds to prevent bankruptcy are legally barred from joining the board at other companies. They also want to tackle the cult of the CEO by encouraging the City to appoint co-chief executives.
“There’s this idea that the CEO is so revered that it’s very difficult ever for [the] board to challenge them,” says Mr Zahawi.
Banker bonuses should also be subject to a 10-year clawback, the authors suggest, while women should make up at least 30pc of company boards because greater diversity changes decision-making and brings better business performance.
If businesses do not comply within a year with this gender recommendation, the authors believe legislation should force them to do so. “What all those hard policy things are trying to support is a change in culture of an industry, which is always difficult,” says Mr Hancock. “If you change the tone of the board, that’s a good starting point.”
You can read the full piece here.
In calling for these rules, the two Conservative MPs are in line with a growing groundswell of opinion in the City, as I blogged about earlier this year:
Diversity in Britain’s boardrooms may not have moved very far up the political agenda yet, but it is the subject of regular debate in business circles – with the Financial Times and Evening Standard in particular both regularly running pieces from contributors concerned about the topic.
It’s a subject the Evening Standard columnist Chris Blackhurst turned to this week. Here’s what he had to say: “… I’ve never agreed with the notion before – having forced numbers of anything is alien, implying as it does preferment that is not due to merit but some other reason. But I can’t see another way…
“It would be wrong to claim there has been a lack of positive noise over the last 20 years. Businessman after businessman (you see, it’s nearly always a man) has come out to declare how they wish to see more females in their boardrooms, how they believe they’re a good thing because they’re more empathetic, less confrontational, blah, blah.
“As for the argument this is a licence for the advancement of talentless women, there’s nothing unique in that: talentless men are always making it to the boardroom.”…
Speaking on the topic late last year Equalities Minister Lynne Featherstone said, “While I’m pleased to see the number of female-free boardrooms continuing to fall, it’s worrying that women – who make up more than 50 per cent of the population – still account for just one-eighth of FTSE 100 directors. Making boards more diverse is not about political correctness – it’s about making sure companies draw senior staff from the widest possible pool of talent, which is good for business, good for staff and good for customers.”