The representation of women on health service boards is falling, Appointments Commission chair Anne Watts warned delegates.

'Diverse boards matter, not just representationally but as a business case as well,' she stressed.

'There is real concern that we need to tap into that talent. We need to become inclusive much more quickly.'

In recent years the representation of women has fallen from around 42 per cent to 37 percent.

Black and minority ethnic representation is fairing better, at 12 per cent against a target of.10 per cent, while disabled non-executive board members make up 5 per cent against a target of 6 per cent.

The commission is working with BT on a pilot project to see what support major companies give to staff who want to become non-executives.

'We are looking at the talent which might come forward,' Ms Watts said.

She.hopes companies will encourage high-flying staff to gain experience on public boards on the way to being appointed to their own company boards.

The commission's work is undergoing a review to seek improvements. In 2006-07 it handled 18,000 applications and made 2,200 appointments, only 0.03 per cent.of which attracted complaints.

According to feedback from the health service, successes include being seen as having fair and open appointment processes and getting the right people in post after primary care trust.reconfiguration.

Among the improvements being called for are overhauling cumbersome processes and modernising its approach to governance.

The commission is responsible for appointing chairs and non-executive directors to NHS bodies and Department of Health quangos.

Dr Jay Bevington, a governance expert at PricewaterhouseCoopers, said boards 'must lead, not lag behind, executives'.

'Some boards see themselves as having an insurance role. Boards are about so much more than that.'

PwC research among boards across the public sector has revealed a sharp discrepancy between how well executives and non-executives perceive their effectiveness.

While 74 per cent of non-executives feel they are scrutinising the executives effectively, only 43 per cent of the executives agreed.