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A new report from Cranfield School of Management finds women are increasing on the boards of top companies, but that these continue to be mostly non-executive directors.
Britain’s leading companies are making progress on the number of women they have on their boards, but that increase continues to come almost wholly from non-executive directors, as new figures show.
The latest report from the Cranfield School of Management shows that over the last year the percentage of women on FTSE 100 boards has increased from 29% to 32%, meaning the Hampton-Alexander 33% target set for 2020 is “in sight”.
It says 292 women hold 339 directorships on FTSE 100 boards, showing several women are on more than one board. The report says the percentage of female non-executive directors (NEDs) is at the all-time high of 38.9%. However, the percentage of female executives remains “worryingly low” at 10.9%. The same is true of FTSE 250 boards, where the percentage of women directors rose from 23.7% to 27.3% this year, the number of companies with at least 33% women on their boards increased from 59 to 88 this year and the number of all male boards dropped to three. However, this was mostly due to a rise in female NEDs [now standing at 32.8%]: the percentage of female executive directors (EDs) is just 8.4%. While the number of women in executive roles in FTSE 250 companies has increased to 37 (8.4%) and 26 women are in Chief Finance Officer or Finance Director roles, the report notes that there are still only five women in CEO roles.
In the FTSE 100, the report says 48 companies have already reached the required target of 33% women on their boards by 2020, up from 32 last year. Kingfisher and Rightmove hold the top position with 50% women on their boards and Schroders is described as the most improved company in the top 10 with 45% women on their boards, having increased from 27% last year.
However, the report says the increase in women holding executive roles is only marginally up – just 28 women hold executive roles at 25 companies. The majority of these are chief finance officers/finance directors (CFO/FD) (13) and seven are CEOs.
Whilst the number of female NEDs has increased to 311 this year, the number of women in a Chair position
has dropped to five, although the number of women in a senior independent director (SID) position has
increased slightly to 21. The report points out that there is growing evidence that once women are appointed to boards they have significantly shorter tenures and are less likely to be promoted into senior roles.
The report includes a detailed breakdown of broader diversity issues. It says the majority of female directors are British (55%) and the remaining women come from 18 countries across the world. Only 11% of the women directors are from black or ethnic minority backgrounds. The average age of the female directors is 57.3, approximately two years younger than the male directors at 59.2 years of age. The gap is slightly larger at 3.6 years for NEDs – 57.9 years for women and 61.5 years for men. The report states: “This has been a consistent finding every year since 2003 when we first measured age. It is counter-intuitive as women are more likely to have taken career breaks than men and may indicate that mature women are being overlooked for appointment to NED roles.”
Seventy six per cent of the women directors have an undergraduate degree, compared to 86% of the new women directors appointed during 2011-2015. Thirty five per cent of the women have postgraduate degrees. The women attended a wide range of universities with only 11% coming from Oxbridge. Only 13% of the women have a recognised financial qualification, but 22% have a MBA degree (in which finance is a core subject). Moreover, 55% of the women have held various roles in finance. The majority (61%) have won various public awards over their lifetimes.
The study also looked at the best 10 and worst 10 companies in the FTSE 100 in terms of women on their boards and their gender pay gaps (GPGs). The top companies had a lower GPG than the bottom companies – 15.7% compared to 22.6%. Diageo was singled out for having a significant number of women at all levels and a GPG of -2.1%.