The number of women in the boardrooms of the UK’s top companies has increased, but there has been no movement in diversity reporting and only around a quarter address diversity in their boardroom evaluation process, according to a report from Cranfield School of Management.
The report says women now account for 19% of FTSE 100 and 15% of FTSE 250 board positions – the highest level since Cranfield began monitoring the number of women in Britain’s boardrooms in 1999.
The report acknowledges that the pace of increased diversity has varied. In the last six months 27% of FTSE 100 and 30% of FTSE 250 new appointments went to women.
Professor Susan Vinnicombe OBE, Director of the Cranfield International Centre for Women Leaders and co-author of the report, said: “We are definitely seeing a cultural shift taking place within UK business. We have seen progressive steps taken by many stakeholders to increase the level of female talent at the most senior levels of the UK’s top companies and we are starting to see a shift in perceptions from Chairmen and Chief Executives. It has been a long and slow journey, but it is encouraging to see the UK is making steady progress towards [Lord Davies’] 2015 target of 25%. I am confident that with renewed effort over the next two years we should reach the target.”
The report also looks at the progress FTSE 350 companies are making in adopting the new recommendations in the Corporate Governance Code 2012, which requires them to publish by the end of their current financial years how they plan to implement their boardroom diversity policy.
The research found nearly all (94%) FTSE 100 companies now acknowledge the need for greater boardroom diversity and two-thirds (65%) state a clear policy to achieve this. However, less than half (42%) opted to disclose measurable objectives to increase the number of women on their board and only a quarter (27%) address diversity in their board evaluation process. Overall, there is little change in diversity reporting by the FTSE 100 companies, compared with early adopters of the Code reported on last year.
The picture appears to be worse among the FTSE 250, it says. In a sample of 50 companies, while 82% recognise the need for greater boardroom diversity, only 18% state a clear policy and just 14% have set measurable objectives, although almost a quarter (24%) do address diversity in their board evaluation process.
Dr Ruth Sealy, co-author of the report, said: “It is disappointing that a significant proportion of companies have not yet fully responded to the new Code provisions on reporting gender diversity. Nevertheless, our research did uncover a number of excellent examples of companies that get it right when it comes to reporting on diversity, including Diageo, Rolls Royce, Experian and BAE Systems, in the FTSE 100, and WS Atkins in the FTSE 250. They all had clear objectives not just on numbers, but also on the processes to achieve those numbers.”
“We urge companies to view the diversity provisions in the 2012 Code as an opportunity for improved corporate governance and to focus on outcomes rather than activities in monitoring their progress towards increasing gender diversity in senior roles. Thus setting measurable objectives and sharing practices that appear to really work is crucial”, said Caroline Turner, co-author of the report.
Minister for Women and Equalities, Maria Miller said: “Women are vital in building a stronger economy and we need to make sure we are making full use of their talents. We have made significant progress in removing barriers which prevent those that choose to work from achieving their full potential, but what we also need to see is business embracing a wider cultural change.
“This new research shows that we’ve made unprecedented progress in increasing the number of women on boards following Lord Davies’ report in 2011. It is good to see the pace of change in the number of board appointments in the FTSE 250 have been higher than in the FTSE 100. However, FTSE250 firms need to ensure that they are producing and publishing policies on boardroom diversity. I want firms to redouble their efforts on both fronts to ensure we are enabling women to fully contribute their talent.”
Commenting on the report Lord Davies of Abersoch CBE said: “There are real grounds for optimism in this report, not least the case studies and examples of good practice from companies across a range of sectors. They know that using all of the talent available to them, fostering the right mix of skills and backgrounds to provide different perspectives and customer insights, is not an optional extra. It is a compelling business need.”