With election day fast approaching, the Conservative Party has today pledged to introduce "new rules" to "get more women onto boards of public companies". The Party is not proposing that a certain proportion of board directors should be female but is instead proposing - in its Contract for Equalities document, available here (pdf) - that: We will require the long list for directorship appointments to include 50 per cent female candidates. This will help ensure that companies recruit from a diverse pool of candidates. It will apply to executive directors as well as non-executive directors. We will require all non-executive director positions to be advertised to ensure that talented potential candidates have the chance to apply for boardroom vacancies".
Some questions and observations: do the Conservatives mean public companies or listed companies? What form will these rules take (board diversity is something being considered by the Financial Reporting Council as part of its review of the Combined Code)? Main Principle A.4 of the Combined Code provides that "[t]here should be a formal, rigorous and transparent procedure for the appointment of new directors to the board". It does not, however, follow that board posts are advertised, a point recognised by Principle A.4.6:
A separate section of the annual report should describe the work of the nomination committee, including the process it has used in relation to board appointments. An explanation should be given if neither an external search consultancy nor open advertising has been used in the appointment of a chairman or a non-executive director".
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