Female directors are more likely to spot a company’s need for diversity in areas such as age, race, and class, a new report shows.
Women board directors are more likely to identify a company’s need for diversity in areas such as age, race, and social background, a report has found.
While both male and female directors consistently picked out gender diversity on boards as an “area for improvement”, women were more focused than men on simultaneously boosting other types of diversity, according to new research from the 30% Club, a campaign group.
The report found that women were three times more likely to recommend greater ethnic diversity on their boards than their male colleagues. They were also twice as likely to see a need for more overall diversity across the company’s workforce.
The 30% Club, an international campaign for more gender diversity on boards, analysed 100 UK companies’ board reviews and compared the issues raised by male and female directors. A board review is a process where directors can analyse their board’s effectiveness.
“The findings further confirm that a more gender-diverse group of board members will consider a greater variety of issues and ask a wider range of questions,” Hanneke Smits, global chair of the 30% Club and CEO of BNY Investment Management, said in a statement.
“Of particular importance in the report is the evidence that female board directors place a greater priority on hiring diverse teams and therefore increasing access to a broader pool of skills and experience.”
The campaign group used datasets from Lintstock, an advisory firm that helps companies to put together board reviews and also compiles an index on board performance. Around 70% of the businesses analysed for the report were FTSE 350 companies.
The number of female directors on UK company boards has climbed steadily in recent years. Women now occupy 40% of the board roles at FTSE 350 companies, according to research published last week, thus hitting a gender diversity target three years ahead of schedule.
The FTSE Women Leaders project, which published the research, noted there was still “more to do” regarding the proportion of women on executive committees, which stood at 27% in the FTSE 350. An executive committee is a smaller subset of board leaders, which serves as the top tier of management and which can make urgent decisions between board meetings.
The 30% Club wants to see a minimum of 30% female representation on companies’ boards and executive committees – the campaign group says “this is the critical mass at which research shows minority voices are heard.” The majority of boards that it analysed for today’s report had 20-40% female representation.
The report also picked out many areas where male and female directors were similar. For example, it found no material difference between men and women in terms of their appetite for risk, although there were some differences over which teams should ultimately oversee risk management. Both men and women also felt that their boards did not spend enough time on company strategy.