Fears that number of women directors is stagnating
There has been almost no movement in the number of women directors of the UK's leading 100 firms in the last year, says a report by the Cranfield School of Management.
This is the third year running that the number has not increased. The report says there are 135 female directors out of 1,076 people on FTSE 100 boards [12.5%].
In 2008 there were 12% and in 2009 12.2%. The slight change is due to just three more women being appointed to the board of the top FTSE 100 companies.
However, the number of companies with no female directors has decreased to 21 (from 25 in 2009), but of the 135 new appointees to FTSE 100 boards in the past year (12.5% turnover), only 18, just 13.3%, were women.
The leader in terms of female directors is Burberry with three out of eight of its directors being women, including the chief executive and the chief financial officer. It also has a female non-executive director.
The research also found that 52.4% of FTSE 250 companies have no women on their boards and only 7.8% have women board directors.
Report co-author Dr Ruth Sealy commented: “There is still too much female talent not making it to the boardroom. Eighty-two of the FTSE 100 companies have women on their executive committees. These women are a rich resource pool for future board directorships. This pipeline of women continues to grow each year – there are now 2,551 women on the corporate boards and executive committees of all FTSE listed companies.”
Equalities Minister Lynne Featherstone said: “While I’m pleased to see the number of female-free boardroooms continuing to fall, it’s worrying that women – who make up more than 50 per cent of the population – still account for just one-eighth of FTSE 100 directors. Making boards more diverse is not about political correctness - it's about making sure companies draw senior staff from the widest possible pool of talent, which is good for business, good for staff and good for customers. That’s why the Government is committed to working with employers to boost the number of women in Britain’s boardrooms.”
This year the report takes a retrospective look at companies who have consistently performed well on gender diversity and those that have failed to make any progress. This, it says, shows that it does not account for the polarising trends regarding gender diversity of boards.
Professor Susan Vinnicombe OBE, co-author of the report said: “In our view chairmen overplay how the small size of boards can constrain gender diversity. Our report clearly demonstrates there is no correlation between board size and diversity. The top two companies in the Female FTSE 100 list are Burberry and Alliance Trust who have only eight and nine on their respective boards, yet manage to have three women directors each. Further afield, nearly 30% of new appointments to Australian boards this year, of which the average size is seven, have gone to women.”
The report recommends:
- Strengthening the new principle on diversity in selection to ‘Comply or Explain’. Any Chairman with less than 20% women on their boards and executive committees needs to explain why this is the case in their annual reports. This should apply to all FTSE 350 listed companies. The 20% should be reviewed in three years time with a view to lifting it to 30%.
- Advertising all non-executive director positions in the private sector.
- Requiring search consultants to produce balanced candidate lists.
- Continuing to make the appointments process as rigorous and objective as possible through use of skills audits.
- Using peer-to-peer pressure from FTSE 100 Chairmen to encourage FTSE 250 Chairmen to seek female candidates for their boards.