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A new study by Cranfield School of Management finds that little has moved when it comes to female directors on boards.
The number of women executives on boards of FTSE 100 and 250 companies has flatlined for another year, according to a study by the Cranfield School of Management.
The study shows the percentage of women in FTSE 100 boards is 38% and the parallel figure for FTSE 250 boards is 35% which means they have passed the 33% target set by the Hampton-Alexander review for 2020, but there is considerable variation across boards, with 21% of the FTSE 100 boards and 32% of FTSE 250 boards yet to reach the Hampton-Alexander target.
Women hold 393 directorships across FTSE 100 boards. However, while the percentage of female Non-Executive Directors (NEDs) stands at 44.4%, an all-time high, in comparison to the percentage of female Executive Directors (EDs) which stands at just 13.7%. On FTSE 250 boards women hold 688 directorships and 41.2% of the NED roles, but only 11.3% of the ED roles.
Seventy-nine FTSE 100 companies have met the Hampton-Alexander target, with Diageo leading with 60% women on their board and Ocado lagging the most with only 17% women on their board. The researchers say that after 10 years of voluntary targets it may be time to take further action. They say: “It is time to address the problem of these recalcitrant companies who do not take gender diversity seriously.”
The study looks at the number of women in ED roles in FTSE 100 companies. Like last year, there are only 31 women holding executive roles in 27 companies. There are now eight women in CEO roles and 15 in CFO/FD roles. It calls for a greater focus on talent management and succession planning for executive roles.
The number of women in senior NED roles has increased. There are 12 female Chairs, although one woman chairs two boards, and two Chair designates. The number of women holding Senior Independent Director (SID) roles has increased to 25 this year and 35% of board committees are chaired by women. The study’s authors say there should be much faster progress in the appointment of women into Chair roles and they have identified a list of potential women Chairs who may have greater awareness of gender diversity in the appointment process.
Male directors tend to be older than women directors and to stay longer on boards than their female counterparts. Further research found that critical mass of women on boards is important but not enough on its own to bring change, that succession planning is key, that women in senior roles sends out a powerful message but the roles of the CEO and Chair are crucial and that rather than gender diversity being a trickle-down process, it is more likely to be generative, requiring proactive attempts to tackle it.
One hundred and sixty-nine companies of FTSE 250 companies have now met the Hampton-Alexander target, but again there is wide difference across companies. Games Workshop Group Plc leads with 67% women on their boards compared to ContourGlobal Plc which has only 11% women on their board (although they have 46% women in executive roles).
Like last year there are only 47 women holding executive roles; there are eight women in CEO roles, 26 in CFO/FD roles and four in COO roles. Women fare better in senior NED roles – 14% of Chair roles, 30% SIDs and 37% board committee chairs are held by women.
The report calls for employers to focus on creating inclusive cultures, back by data transparency to increase awareness, action planning, review and feedback loops to drive change. It says inclusive leadership it vital and that inclusion and diversity should be threaded through all leadership development competencies and through workgroup inclusion, team building activities, team-based learning and promoting frequent interaction between majority and minority groups.
It says: “Organisations prioritise practices to promote belonging, but to foster inclusion they must be balanced with practices focused on valuing differences, such as participation in decision making.”
It adds that employers should be held to account via employee surveys and diversity representation data needs to measure critical points in the career pathway, from hiring and retention, to the length of time to gain promotion for different groups.