- Diversity in the boardroom is needed to avoid ‘group think’-

Companies need to redouble their efforts to exploit the best talent available for the boardroom, irrespective of gender or background, says ACCA (the Association of Chartered Certified Accountants), as the EU debates how to promote the equal participation of women and men in decision-making at all levels and in all fields, in order to make full use of all talents.

“Encouraging women into senior management positions is a crucial part of the global drive to improve equality between men and women. In an environment with a shortage of independent non-executive directors with appropriate skills, women are still a largely untapped source of talent for boards”, says Helen Brand, ACCA's Chief Executive.

ACCA welcomes the endorsement by EU ministers in charge of employment and social affairs of a renewed European pact for gender equality aimed at increasing women's presence in decision-making bodies. As a first step, the global accountancy body wants to see transparent diversity reporting by companies placed at the heart of these efforts: companies should adopt policies on boardroom diversity and report annually on progress made.

Gender equality is enshrined in Article 23 of the Charter of Fundamental Rights of the European Union, but progress is slow and that de facto gender equality has yet to be attained.

Helen Brand says: “ACCA supports greater diversity in terms of gender, but also in terms of background and experience. Transparency is the key to overcoming gender inequalities in companies – not quotas. We would not want to see new regulation on this issue and trust that companies will commit themselves to enhancing boardroom representation on a voluntary basis. To allow for greater transparency, ACCA recommends that companies should routinely report gender-detailed HR data for all staff, including board members.”

ACCA believes that diversity on boards makes good business sense, as different perspectives can help to avoid ‘groupthink’ – where boards appoint new members in their own image – which is a particular concern as the pool from which new directors is drawn at present is already small.

Helen Brand adds: “If the rise from middle management to board positions is not delivering, then barriers to this ascent need to be removed. Policy areas such as work life balance, salaries, mentoring, organisational and board culture, the ‘tone at the top’, and women’s own attitudes towards career progression need to be addressed. These need to be rationalised rather than bringing in quotas, which might prove counter conducive to the values of opportunity and diversity.”

ACCA recommends:

          o transparency in disclosure of gender-diverse board practices – especially where companies publicly disclose their board membership. This involves setting clear performance standards and evaluation criteria for promotions, rather than making them on personality grounds.
          o that organisations should build support programmes and provide access to role models, networks and mentors to help women break down the boardroom doors.
          o the development and advocacy of a business case for gender diversity on boards – this would involve business leaders openly championing the place of women on boards.
          o that organisations instil a corporate and governance culture promoting gender diversity on boards, with a corporate culture supports diversity.

In encouraging diversity, ACCA nevertheless believes that board appointments must ultimately be about assembling the right collection of skills and experience.

Helen Brand explains: “Making appointments to a board of directors of a public company is a very serious business and should be taken seriously both by the company and the individual director. Company law imposes extensive personal responsibilities on individual directors: all directors need to be able to fulfil these responsibilities in their own interests and those of their board colleagues.

“The cause of diversity would not be met by lowering of standards", Helen Brand concludes.

- ends -

Facts about quotas in other countries

          o Norway has introduced a quota system, which requires the boards of public companies to have at least 40% women directors.
          o France has introduced legislation in parliament requiring that women constitute 50% of the boards of directors of publicly listed companies by 2015.
          o Spain has also introduced a regulatory requirement that any private company that is awarded a public contract must have a board of directors of whom at least 40% are women.
          o In Iceland, the parliament has adopted a legislative reform requiring publicly owned companies and public limited companies that have at least 50 employees and boards with more than three persons to have at least 40% of each gender by 1 September 2013.

For further information, please contact:
Cecile Bonino
+32 (0) 2 286 11 37
Cecile.bonino@accaglobal.com

Notes to Editors

         1. ACCA (the Association of Chartered Certified Accountants) is the global body for professional accountants. We aim to offer business-relevant, first-choice qualifications to people of application, ability and ambition around the world who seek a rewarding career in accountancy, finance and management.
         2. We support our 140,000 members and 404,000 students in 170 countries, helping them to develop successful careers in accounting and business, with the skills required by employers. We work through a network of over 80 offices and centres and more than 8,000 Approved Employers worldwide, who provide high standards of employee learning and development. Through our public interest remit, we promote appropriate regulation of accounting and conduct relevant research to ensure accountancy continues to grow in reputation and influence.
         3. Founded in 1904, ACCA has consistently held unique core values: opportunity, diversity, innovation, integrity and accountability. We believe that accountants bring value to economies in all stages of development and seek to develop capacity in the profession and encourage the adoption of global standards. Our values are aligned to the needs of employers in all sectors and we ensure that through our qualifications, we prepare accountants for business. We seek to open up the profession to people of all backgrounds and remove artificial barriers, innovating our qualifications and delivery to meet the diverse needs of trainee professionals and their employers.

Cecile Bonino
Public Affairs and Media Relations Officer-EU ACCA
CBI business house
14 rue de la Science
BE-1040 Brussels
tel:+32 (0) 2 286 11 37
mob: +44 (0) 7809595008
http://www.accaglobal.com

Accountants for business – creating sustainable value www.accaglobal.com/accountants_business