Management Research

Are you on board?

Yesterday Lord Davies published his independent review into women on boards. In a press release he said as a result of this report, which was commissioned by Business Secretary Vince Cable in August last year, we need a radical change in the boardrooms in Britain and a radical change of culture.

Maybe not surprisingly he has not advocated the use of quotas but instead has placed the onus on business to reform their boards by 2015 or face government measures. He has recommended that UK listed companies in the FTSE 100 should be aiming for a minimum of 25 per cent female board members by 2015 and that FTSE 350 companies should be setting their own challenging targets.

Lord Davies also calls on Chairmen to announce these goals in the next six months and Chief Executives to review the percentage of women they aim to have on their Executive Committees in 2013 and 2015. He calls for a ‘comply or explain’ approach whereby companies should publish their own targets and comply with them or explain to shareholders why they have not done so.

The recommendations are not onerous and do not seem unachievable, in fact it only represents a further 135 women board members in the top 100 companies.

Concern is raised over the flawed system of appointment of non executive directors and the panel call for more transparency in the appointment process.

In summary the main recommendations of the report include:

• All FTSE 100 companies should have a minimum of 25% women on boards by 2015
• All FTSE 350 companies need to set out their targets for the number of females on their board by 2013 and 2015
• Companies should be expected to report on the proportion of women on their boards, women in senior positions and female employees in the whole organisation
• The UK Corporate Governance code should be amended to require companies to establish a policy of boardroom diversity
• Chairmen should disclose meaningful information in their annual report about their firms' appointment processes and how they address diversity including a description of the search and nominations process
• Executive search firms should draw up a voluntary code of conduct addressing gender diversity and best practice relating to FTSE350 board level appointments.

Gender diversity is beneficial for business so there is an overwhelming business case for these recommendations but the Chairmen and Chief Executives of UK companies need to take action, supported by others in the corporate world, including investors and executive search firms.

For more discussion an editorial, Women on boards: the drive for cultural change, is available on the MBS portal and the full Lord Davies report Women on Boards is available online.

The lost art of manufacturing

Manufacturing conjures up images of dirty polluting factories, heavy engineering, and northern locations in industrial decline. It is easy to assume that manufacturing is no longer important to the British economy but this image is outdated and doesn’t take into account modern British manufacturing which is constantly adapting to the changing needs of its increasingly demanding customers.

 
Currently, at least 10 per cent of UK jobs are in manufacturing, but unfortunately policy makers and successive governments have paid so little notice of it that British industry has fallen into the realms of the mis-understood.

The British Library is holding a series of debates looking at significant public and social issues, challenging some of the common myths and assumptions we make and showing the role social science plays to explain what is happening and pointing the way to solutions.  The next one of these debates, to be held 2nd March 2011 is:  Myths and Realities: manufacturing matters, doesn’t it?

This debate will be chaired by Professor Sir Mike Gregory, Head of the Manufacturing and Management Division of Cambridge University Engineering Department and of the Institute for Manufacturing (IfM).  His research areas are manufacturing policy, international manufacturing and industrial sustainability. His developments in research and his collaborations with industry reflect a broad view of manufacturing and led to the establishment of the IfM in 1998.

An Ifm colleague, Finbarr Livesey, will be one of three speakers at this event.  Finbarr Livesey joined the IfM in October 2002 after working in the USA and the UK. Since joining, he has assisted in the development of and is now the Director of the Centre for Industry and Government. His work focuses on how manufacturing is described in economics, how government policy affects manufacturing, and what the future holds for manufacturing in developed economies.

Speaker Fiona Toye is Chief Executive of the family owned manufacturing business Toye Kenning & Spencer. In an interview last year she said that one of the real challenges the company faces is how to attract young blood to the sector, supporting and encouraging them to develop the skills the company needs.

Skills shortage is also of interest to the final speaker, Professor John Bryson, Professor of Enterprise and Economic Geography at the University of Birmingham and author of Design Economies and the Changing World Economy: Innovation, Production and Competitiveness, Routledge 2010.  Professor Bryson is worried that although the UK has so many success stories in manufacturing and has such a solid base in modern manufacturing, there is a huge threat to the continued survival and competitiveness of British manufacturing. This threat involves hard-to-fill vacancies and skill shortages that will make it extremely difficult for firms to grow, and in some cases even continue to survive, as companies find it increasingly difficult to recruit commercially aware engineers and other forms of skilled labour.

The debate will explore the evidence, making sense of the statistics and the issues.
For more details go to Myths and Realities: manufacturing matters, doesn’t it?