Number of women on boards rises to nearly 16%
The number of women on the boards of FTSE companies has risen to 15.6%, although many of the new appointees are non-executive directors, according to the 2012 Female FTSE report from Cranfield School of Management .
The report, published to mark the anniversary of the Lord Davies’ review of women on boards, says the 15.6% rise represents an increase on what was a three-year plateau of 12%.
There are now 141 women holding 163 FTSE 100 board seats (out of 1,086 board positions), says the report. The number of companies with no women has dropped to 11 and the number of companies with more than one woman on the board has increased to 50.
The Davies’ review recommended a minimum target of 25% female representation on the boards of FTSE 100 companies by 2015. The Cranfield report shows that in the year to January 2012, 47 new appointments (25%) out of 190 were made to women. It says that if this pace of change continues to gather momentum, as predicted by Cranfield, 26.7% of directors could be women by 2015 and 36.9% by 2020. This will exceed the targets set in the Davies report.
The report also shows that, of the 47 new female appointments, 29 of the women (62%) have had no prior FTSE board experience. It says this suggests that the appointment process is beginning to open up to new women and the search and appointments process is becoming more creative.
Professor Susan Vinnicombe, co-author of the report, said: “The past 12 months have seen a significant amount of global activity around diversifying boards. After a decade of incremental increases in the UK, we are pleased to be reporting improvements that are more substantive. If the momentum we have seen since the Lord Davies’ review continues we could achieve 30% women on boards in less than four years, which would be a terrific achievement. We urge chairmen, chief executives, executive search firms, investors, journalists and women to stay focused and use this momentum to change the status quo permanently.”
Home Secretary and Minister for Women and Equalities Theresa May said: “I’m delighted by this unprecedented progress. While there’s still much to be done, today we should celebrate just how far we have come. It is particularly encouraging that this progress has been led by businesses. Government has put in place the framework, but it’s companies themselves who are seeing that they simply cannot afford to ignore the skills and talent of half the population.”
Lord Davies said: “Over the last year some excellent progress has been made. We’ve seen a significant increase in the percentage of female board appointments and the number of all-male boards has halved. I believe we’re on a steady journey towards our 25% target, but the reality is that a lot more still needs to be done. We’ve got to keep up the pressure on business - particularly on FTSE 250 companies. And at the same time CEOs must try and improve the gender balance of their executive committees, because this isn’t just about equality, it’s about performance. And the simple fact is that the more diverse your team, the better it performs.”
The report shows the company at the top of this year’s ranking is Diageo with four women making up 44.4% of their board. In second place is Burberry, with three women out of eight directors. They are also one of only three FTSE 100 companies to have two female Executive Directors (EDs) with both the Chief Executive and Chief Financial Officer roles held by women. In third place is Pearson, who have had two female EDs for a number of years and have recently added a second female Non Executive Director, (NED) taking their total to four (33.3%).
Although the figures are moving in the right direction, the report does highlight the increasingly wide gap between the numbers of women non-executive directors (143 women, 22.4%) compared with the numbers of women executive directors (20 women, 6.6%).
Report co-author Dr Ruth Sealy commented: “Whilst the overall percentage of women on boards has begun to increase at an encouraging rate, it is hard to ignore the fact that most of the increase is occurring amongst NED directorships. Whilst the increase in the numbers of female NED positions is important, it is imperative to ensure that as much focus is placed on improving the female executive pipeline. This is requisite for better balanced boards and senior leadership going forward. Companies who are addressing this demonstrate a true commitment to changing organisational cultures and sustaining genuinely meritocratic environments.”
This year the report takes a closer look at the pipeline to the top and reveals a mixed picture. Cranfield is concerned that many of the companies were unable to supply information on the women they employ at junior, middle and senior levels, because the data are not recorded. What the report did find was the numbers of women at senior executive level varies dramatically.
“If you do not have an accurate picture of your workforce, you cannot manage your pipeline successfully. Data on women at all levels of an organisation are essential to building a sustainable talent pipeline and ensuring that capable women do not miss the opportunity to rise to board level,” said Dr Sealy.
Professor Vinnicombe added: “From our research it is clear that many of the FTSE companies are successful at attracting women at entry level, and developing them and retaining them after maternity leave, but are still spectacularly unsuccessful at promoting them to executive level.”