New code of conduct for search firms launched

Business secretary Vince Cable has launched an enhanced code of conduct for executive search companies in a bid to get more women on company boards.

More than 70 firms signed up to the original voluntary code of conduct in 2011. The new code comes in response to the independent Sweeney review in February 2014, and aims to recognise those firms driving progress and embedding higher standards.

The new ‘Enhanced Voluntary Code of Conduct for Executive Search Firms’. builds on the terms of the standard voluntary code and will also recognise the outstanding efforts of search firms working to build the pipeline of FTSE board directors of the future.

It includes 10 new provisions, from launching initiatives to support aspiring women to sharing of best practice and running awareness programmes.

It also requires headhunters to submit summary data to the independent Davies Steering Group annually, to confirm they meet the requirements for accreditation under the code.

They will also will also be encouraged to visibly signal their commitment to gender diversity, on websites and in discussion with clients, as well as publishing relevant summary data on their track record.

Last week, mining company Glencore – which had been the one remaining FTSE100 company not to have a woman on its board – finally appointed it first female director.

Cable said: “Now that all FTSE 100 boards have at least one woman serving on them, and all key stakeholders have embraced the gender diversity agenda, we are confident that with sustained and continued action, we will meet the target of 25% women on FTSE 100 boards by 2015.”

“I am looking forward to finding out which firms have passed the higher standard set by industry.”

Kate Shoesmith, head of policy for the REC, added: “The new enhanced code is a step in the right direction. However, it sets a number of challenging targets for executive search firms which won’t be achievable without the endorsement and co-operation of their FTSE 350 clients.

“We know that there is still a lack of understanding about the executive search process and what ‘good’ looks like.”

“We made a strong recommendation earlier this year that the gender balance of long and shortlists should be published so that executive search firms who consistently put forward balanced shortlists can be recognised, even when the client may not ultimately choose to hire women.”