UK businesses should set aspirational targets rather than introduce women-only shortlists to increase the number of women on boards, according to a non-departmental public body.

The Equality and Human Rights Commission made the recommendation when it published new guidance for companies, search firms and recruitment agencies about positive steps that can be taken to improve the representation of women on boards.

The organisation said firms could target networking opportunities for women as well as providing mentoring and sponsor programmes, which assist in the development of female talent.

"Research suggests that companies with diverse boards produce better performance and many companies recognise this," said Laura Carstensen, the EHRC commissioner.

"Equality is for everyone and it is clear that there is still much more to be done to ensure that women have an equal opportunity to succeed on merit in gaining board positions."

The commission also warned that using women-only shortlists in order to increase gender representation on boards is unlawful under equality law.

"We completely agree with the commission that board appointments must be made on merit, demonstrated through fair and transparent criteria and procedures," said Oliver Parry, corporate governance adviser at the Institute of Directors.

"No woman or man wants to be on a board of a company simply because of their gender.

"We hope that the guidance issued today will help boards to appoint more women through measures including aspirational targets, wider advertising for posts and mentoring and shadowing programmes."

The comment came as the EHRC launched a UK-wide inquiry into the recruitment and appointment practices of the top 350 listed companies at board level.

The probe, which will be chaired by Carstensen, will work closely with companies to examine their recruitment and selection processes, and the experience of applicants and decision makers.

The aim of the investigation is to identify recruitment practices that make a difference and deliver open, fair and merit-based appointments.

Lord Davies set a minimum target in 2011 that the UK's top companies should have 25% female representation on their boards.