Companies may face quotas unless they promote more women to board level, U.K. Prime Minister David Cameron said, arguing that businesses are “failing” the economy by not having enough females in senior positions.
Appointing women as directors and encouraging them as entrepreneurs are “about quality, not just equality,” Cameron said at a meeting of the Northern Future Forum in Stockholm today.
“The case is overwhelming that companies are run better if we have men and women alongside each other,” Cameron said in a round-table discussion. “If we can’t get there in other ways I think we have to have quotas.”
The U.K. is working to implement the recommendations of a February 2011 report by Mervyn Davies on increasing the number of women on boards, according to a submission to the meeting. As a result, women now make up 15 percent of directors of companies in the benchmark FTSE 100 Index, up from 12.5 percent last year, and there are now 10 all-male boards in the FTSE, down from 21 last year.
Starting in October, as a result of a new provision in the U.K. corporate-governance code, companies will have to report on their policy for boardroom diversity and how they are making progress in delivering it.
‘Unlock the Potential’
“Women now make up nearly half the workforce across Europe and the majority of university degrees, but they are still not sufficiently represented at the senior boardroom level,” Cameron said in a statement before the meeting. “The evidence is that there is a positive link between women in leadership and business performance, so if we fail to unlock the potential of women in the labor market, we’re not only failing those individuals, we’re failing our whole economy.”
Cameron later rowed back on his comments about quotas, saying that what is needed is “positive action stopping short of positive discrimination in law through quotas.”
If women entrepreneurs in the U.K. were as successful as those in the U.S., there would be an extra 600,000 women-owned businesses contributing 42 billion pounds ($66 billion) to the economy, according to the U.K.’s submission, which was published on the forum’s website.
Cameron also said he wants to explore a Swedish program that gives tax breaks to homeowners who employ people to provide household services, such as cleaning and gardening.
The forum was established by Cameron last year to bring together the prime ministers of Nordic and Baltic countries along with the U.K.
This year’s conference, hosted by Swedish Prime Minister Fredrik Reinfeldt, focused on women in business and older people remaining in the workforce.
“A male atmosphere creates more risk and a greater risk of corruption,” Reinfeldt said in the discussion. “To say the least, more women in the financial sector would be very good in bringing down the risk level.”