In February, Lord Davies of Abersoch, the former Trade Minister, published his report Women on Boards. In it, he gave the chairmen of FTSE 350 companies until this month to set out the percentage of women they aim to have on their boards by 2013 and then 2015.
Lord Davies was responding to an invitation from the government to promote gender equality on the boards of listed companies.
It will be fascinating to see how many of these companies respond positively to the challenge he has laid down for them. Indications are that most, if not all, of them will do so.
The City was surprised by the action which Lord Davies proposed. Apart from asking chairmen to set out their aspirational goals for 2013 and 2015, other key recommendations included:
● FTSE 100 boards should aim for a minimum female representation of 25% by 2015.
● Quoted companies should disclose each year the proportion of women on their board, in senior executive positions and as employees in the whole organisation
The necessity should be apparent to all. In 2010, women constituted just 12.5% of the boards of FTSE 100 companies and 7.8% of FTSE 250.
Yet, as a study by McKinsey & Company in 2007 showed, there is strong evidence that companies with a high female representation at board and top management level perform better than those without it.
It must be in the best interests of companies to have at their disposal talented leaders who are drawn from a broad range of backgrounds.
Another possibility would be to follow the example set by several other European countries, such as Iceland, Spain and Norway, which have passed legislation introducing quotas in order to increase the representation of women on boards.
Lord Davies decided not to pursue this option. However, he has held out the prospect of Government legislation comprising "more prescriptive alternatives" if the voluntary approach does not produce significant change.
City boardrooms have been put on notice.