All UK listed companies should have to set targets for the number of women in their boardrooms, the CBI business organisation has said.
It said firms that subsequently failed to meet their declared levels should have to explain why, but not face any penalties.
The CBI added that the targets should reflect a company's existing number of female employees.
It was responding to a review into the lack of UK female directors.
This study is being conducted by Lord Davies, who will present his report to the government in February.
The CBI is calling for its proposal to be added to the UK Corporate Governance Code.
It wants all listed firms to report on the diversity within their companies on a "comply or explain basis".
Explaining that the targets should reflect a firm's circumstances, it says a media company with a high number of female staff should set a higher target for the number of its female directors than an engineering firm with just a handful of women employees.
The CBI said that a similar scheme due to be introduced in Australia next year had already resulted in a sharp rise in the number of female board appointments.
CBI president Helen Alexander said: "Boardrooms should harness the talents of the many, not just the few.
"Although women make up half of the population and more than half of university graduates, they remain woefully under-represented at board level.
"What is needed is cultural change, not quotas, ratios or tokenism. That is why we are calling for a flexible system that will allow firms to set targets that reflect the realities of their businesses."
Lord Davies said he welcomed the CBI's response.
He added: "I am pleased to see that this issue has got a strong push behind it from business, but as the recently published Cranfield report highlighted there has been too little movement on diversity in the boardroom for too long.
"To see a step change on this we need to everyone to pull together, British businesses and their shareholders, the government and the headhunting profession, to deliver the changes that will help women to achieve these roles."
The report by the Cranfield School of Management, which was published on 2 December, found that the number of female directors at the UK's leading 100 firms was almost unchanged for a third year running.
It found 135 female directors out of 1,076 people on FTSE 100 boards, or 12.5%.
The figure was 12.2% in 2009 and 12% in 2008, suggesting that the situation was stagnating.