I attended the launch of the Female FTSE Report at the CBI on Wednesday 10th April, along with a distinguished audience of businessmen and women, speakers including ministers Vince Cable and Maria Miller along with Lord Davies and Cranfield University who presented their research.
The audience also included quite a few voluntary sector leaders and I took the opportunity to raise the point that there are great leadership skills in the public and voluntary sector which would benefit many company boards, grow the talent pool and bring new insights and perspectives to senior management decisions.
The key issue the latest findings show is that there has been a decline in the numbers of top female executives on company boards, whilst the number of non-executives has increased and is broadly on target. No-one appears to have a convincing explanation as to why this should be, although it was hinted that the chairs of companies can exert more pressure on non-executive appointments, whilst executive women don’t rise to the top unless the company culture facilitates their development and promotion.
The research found some progress in areas but not in others:
The last year has seen changes in the position of women on boards. The number of women holding FTSE 100 board seats is 169, an increase of 28 on the 2012 figures. The overall percentage of female-held board directorships is 17.3%, an uplift of 2.3% on last year’s figure. The number of FTSE 100 companies with all-male boards has dropped to seven and two thirds (67%) of the FTSE 100 have more than one woman on their board.
In the first six months the pace of change was extremely encouraging. There was a sharp increase in the percentage of new appointments going to women on both FTSE 100 and 250 boards, peaking at 44% and 36% respectively. However, those high levels were short-lived and over the past six months they have dropped to 26% and 29% respectively, showing a considerable gap from the 33% required to reach Lord Davies’ target of 25% women on boards by 2015. That target for the FTSE 100 companies is still in sight but only if the rate of new appointments going to women regains momentum promptly and there is concern that complacency may be setting in, which the UK economy cannot afford.
Cranfield have updated the forecast for the numbers of women on boards in future years with the latest data. On the assumption that FTSE 100 firms can regain the one third/two third ratio of female to male appointments, the target of 25% female FTSE 100 board directors should be met in 2015.
As far as FTSE 100 is concerned the figures show a drop in the percentage of women on executive committees from 18.1% to 15.3% since 2009. It is therefore not surprising that headway is not being made in the numbers of women holding Executive Directorships. Out of 96 companies, 79 had women on their executive committees.
Despite women dominating Human Resources, Law and Marketing in general, this is not reflected at Executive Director level. Further, in terms of paths to executive roles, whilst 48% female Executive Directors were internally promoted the equivalent percentage for men was 62%. Women find it harder to get promoted than men.”
We need a more holistic and schematic approach if we are to give women and minorities access and opportunity to top positions as well as encouraging fresh talent rather than stereotypical appointments to board level positions.
My agenda for change in the light of the research would be as follows:
- To implement a proactive, positive action strategy in companies if the statutory quota is to be avoided.
- To introduce a widely based mentoring programme, which focuses on women in mid-career and those starting out, as well as women at or near the top.
- To develop role models and mentors amongst current CEO’s and board directors, who can talk honestly about difficulties and barriers.
- To encourage further transparency in data sharing and recording. E.g. how many senior men or women access flexible patterns of working and or career breaks for children?
- To evaluate more systematically the data on the benefits to companies, the not for profit organisations, and public sector employers from diversity at the top. Let’s publish data on profitability and long-term growth created by the wider talent pool.
- An engagement / education programme for organisations who are committed to addressing their issues but don’t know how.
- Low cost high quality educational opportunities and return to learn opportunities for women and minorities in disadvantaged areas, potentially delivered through LEP’s or other local bodies.
- A strategy for re-engaging older workers and for keeping them on as mentors for the younger workforce.
- Research to establish barriers for disabled people reaching the top.
- Government to recognise that the boards of public bodies should represent the communities they serve and have an aspiration that 50% of all new appointments to those boards are filled by women (by May 2015)
- The Financial Reporting Council (FRC) should amend the UK Corporate Governance Code to require listed companies to establish a policy concerning boardroom diversity, and to monitor progress in developing the diversity of the executive pipeline.
One of the key issues which is not covered in the report is the retention of women or minorities at the top of the organisation. In view of recent board room departures, and the way attrition affects the talent pipeline as we get nearer to the top of organisations, perhaps this would be a suitable area for future research.