A THIRD of all board seats in Britain's biggest companies should be occupied by women, a key report on gender equality has said.

The government-backed Davies Review says British business still had to "get their house in order" despite the reaching a "major milestone" in increasing the number of women in their boardrooms.

FTSE 100 companies have now met a voluntary target of 25% women board members, says the report's author, Lord Davies.

But some 260 of the 286 women on boards are non-executive directors, with only a handful holding the key decision-making positions on executive committees.

The  former trade minister Lord Davies has used his final Women On Boards review to call for a rise in the level of female representation at board level from the current 25pc to 33pc by the end of the decade.

The UK risks “[falling] well behind European and ... international countries” if the new quota is not met, Lord Davies will warn.

It falls short of the call by First Minister Nicola Sturgeon for  women to make up 50 per cent of boardrooms by 2020.

Sturgeon said the Scottish Government’s 50:50 pledge will “challenge all public, private and third-sector bodies” to commit to gender equality in the boardroom, hoping to achieve 50/50 gender splits on boards by the end of the decade.

The First Minister promised that the SNP would use any power they had in Westminster to push the cause of women’s equality across the whole of UK.

Lord Davies will also expand his recommendations to include firms in the FTSE 350, rather than just Britain’s top 100 companies.

Britain is currently sixth in the world for the proportion of women on company boards, with Norway, where women make up 35 per cent of boards, topping the list.. Many countries ahead of the UK — including Norway, France and Belgium — have set formal quotas for female representation.

Lord Davies said there had been a "steady and sustained increase" in the number of women serving on FTSE boards since 2011, when they made up 12.5% of board members at companies listed on the 100-share index.

He also warns against the introduction of legally enforced quotas to guarantee a female presence on boards, describing them as "unwarranted".

Lord Davies said there had been "a cultural change in the UK corporate scene" over the past four years, but said it was time for big companies to make similar progress in the top jobs.

But he dismissed calls for official mandatory quotas of female bosses, insisting that it was best to take the same voluntary approach with executive posts as his report did with boardrooms.

He said: "The focus of our work was on fixing the boardroom. We've done that and there's very few all-male boards left.

"There's been a cultural change in the UK corporate scene, which was totally dominated by men. That is not the case today. We now need to see the same change, through a voluntary approach, in the executive committee structure of big companies and small companies."

He rejected suggestions that companies were "padding" boards with female non-executives for public relations purposes, insisting the women appointees were qualified for their posts.

And he said the key incentive to promote women was the impact they can have in business terms.

"It's about business results," said the former chairman of Standard Chartered bank, who served as a trade minister in Gordon Brown's government. "The more diverse the group is at the top of the company,the better the results.

"I think also at the top of the company you should represent your workforce and your consumers. People forget that 51% of the working population in the UK is female. These top companies have now got to put their house in order and fix the executive committees.

"We've made it very clear in the report and in engagement with headhunters, chairmen and CEOs, the best route to success is the voluntary approach. I would expect - and I'm very confident - over the next five years to see the same change in executive committees as we've seen in boardrooms."