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The number of women executive directors on FTSE 100 and 250 boards has flatlined or dropped, according to a report by Cranfield School of Management which criticises the lack of progress in improving gender diversity at the highest executive echelons of leading UK companies.
The report’s analysis shows that female numbers have continued to be boosted by non-executive directors rather than by any increase in the number of women coming up through the pipeline. Indeed in the FTSE 250, the number of female executive directors has dropped by eight from 38 to 30 over the last nine months. The statistics show:
Professor Sue Vinnicombe CBE, Professor of Women and Leadership at Cranfield School of Management, said: “Now, more than ever, is the time for disruptive change. We need to think big and act decisively in order to move the needle. FTSE 350 companies need to treat gender diversity as seriously as they treat sales, risk management and innovation, otherwise nothing will change.”
The report includes reference to in-depth interviews with functional directors such as HR Directors, General Counsels and Communications Directors. These are not normally considered for board roles as they are seen as having narrow functions and lacking operational experience and business acumen. The report questions this assumption and calls for them to be considering more seriously as an important pipeline of executive and non-executive board talent.
It adds that companies should recognise that men and women may express leadership aspirations in different ways so they can ensure that not only those that naturally ‘claim’ leadership roles are given the chance to step up and it says the role sponsors, organisational cultures and inclusive talent processes play in forming and affirming leaders needs to be recognised.
Another report, Women Count 2018, released this week by The Pipeline also shows the business dividend of getting more women into executive positions. It says FTSE 350 companies with no women on their executive committee only achieve an average 8.9% net profit margin. Where there are at least 25% women on executive committees, average net profit margins rise by 5%, to 13.9%.
The report also found that female CEOs are instrumental in recruiting more women to senior positions, with female CEOs having more than twice the number of women on their executive committees than male CEOs and female CEOs have four times the number of women executives in Profit & Loss roles on their executive committees compared to male-led companies. Only 4% of FTSE 350 companies have female CEOs, yet within a year these female CEOs have increased by 10% the average number of women executive committee members.