Helena Morrissey: More women on boards, yes. Quotas, no

Every time the subject of "women on boards" comes up, the issue of quotas is not far behind. Those urging compulsory targets typically believe it's the only way to resolve the under-representation of women in boardrooms. The European Commission is again threatening legislation. Yet quotas are, in my view, not just needless but potentially damaging and would undermine the very equality the pro-quota lobby seeks.

We're already seeing a radical shift in the mindset of business leaders about what makes a good corporate board – and that includes (but is not limited to) a better gender balance. The numbers are lagging the shift – but it is happening and, importantly, it is being driven by business reasons, rather than political correctness.

A key driver for change is the financial crisis. The "old gentleman's club" as Lord Davies describes the boardroom of the past, has been proven to be the wrong way to oversee a company. A modern successful business needs a range of experiences, perspectives and personalities. A mix of men and women, young(ish) and old, drawn from different backgrounds and with varied expertise, is the ideal board of today.

If this is now so obvious, why is change still so gradual? A number of steps have been taken that are only starting to take effect and I believe we'll soon see an acceleration. Headhunters are thinking more laterally. They've started looking at the public and voluntary sectors, for example, to widen the pool of female candidates rather than simply referring to a list of "the great and the good".

The next big impetus, I believe, will come from the investment community. Investors want companies to diversify their boards because we want to see better-run businesses.

As big shareholders we have the clout to effect change. One practical step could be for shareholders to abstain or vote against the re-election of those chairmen of publicly listed companies who just "don't get it".

But it is clear to me that nor do investors want quotas; board directors need to be there on merit and there's evidence that shareholder value can be destroyed if quotas are imposed.

Even if voluntary steps are starting to work, should the Government do more? The Prime Minister and his team are already working with the 30% Club to broaden mentoring programmes and help create a database of "board-ready" women. I believe, however, he wants businesses to sort this out themselves and is certainly not hoping to impose quotas. Even those countries with quotas are still struggling with genuine equality. Norway has 40 per cent female non-executive directors but only 2 per cent of its CEOs are women. Quotas are not the answer if we want better gender balance at all levels and better business outcomes. Business culture needs a revolution and better balanced boardrooms are one aspect. I'm convinced we're on the right path without quotas.

Helena Morrissey is CEO of Newton Investment Management and founder of the 30% Club