The overall percentage of women on FTSE boards has increased over the last year with Unilever becoming the first FTSE 100 company to reach gender parity on its board, but the rate of progress has slowed since October, according to a new report.
The Female FTSE Report, by academics at Cranfield School of Management, City University London and Queen Mary University London found that, while the percentage of women on FTSE 100 boards has increased to 26% and to 20.4% on the FTSE 250 boards this year, the rate of progress has slowed since Lord Davies’ closing report in October 2015.
As a result, says the report, board turnover rates have decreased and the percentage of new appointments going to women over the past six months is only 24.7%, the lowest since September 2011.
This is short of the increase required to meet the 33% board target by 2020 as set out in Lord Davies’ second report, requiring FTSE 350 board to have 27% by the end of 2016. In addition to Unilever in the FTSE 100, five FTSE 250 companies also have 50% women on their boards (Electra Private Equity, Grainger, Halfords Group, Renewable Infrastructure Group, and Woodford Patient Capital Trust).
The report adds that 44 companies in the FTSE 100 and 58 FTSE 250 companies have reached at least 27% women on their boards. It says the 33% target could be achieved, but only if the pace of change increases again.
Cranfield School of Management’s Professor Susan Vinnicombe said: “The focus on boards must be preserved as the pace of change has not kept up after the Davies closing report. In order to hit the 33% board target by 2020, chairmen and search consultants must ensure the board appointment process remains robust, transparent and gender-inclusive.”
Progress among executive ranks and in the executive pipeline remains very slow, says the report. Female executive directorships stand at 9.7% in the FTSE 100 and 5.6% in the FTSE 250. This shortage of women in top senior roles may make it difficult to reach the new target of 33% women on boards by 2020, it states. The report also found that women overall hold 19.4% of FTSE 100 Executive Committee roles, and only 10% of operational and C-suite ones. The pipeline of female talent needs to be addressed with urgency, it says.
It adds that data on Executive Committees are not always readily available. The authors stress the need for more robustness and transparency in reporting gender composition at Executive Committee level and below, with companies encouraged to monitor and report gender balance across all seniority levels and it says metrics and targets are effective tools to promote greater gender balance.
Dr Ruth Sealy from City University London, who co-authored the report, said: “For change to be sustainable, we must focus on the pipeline and ensure that women can progress through senior management ranks. Only 19.4% of FTSE 100 Executive Committee members are women, and women hold only 10% of C-suite and operational roles on these committees.”
Co-author Dr Elena Doldor, from Queen Mary University London, added: “Companies must do more to support women’s careers below board level. Our research shows that rigorous gender metrics and voluntary targets are effective tools that companies can use to redress their gender balance and achieve cultural change.”