Board diversity progress slows as fewer women appointed
After a burst of growth, the rate at which women are being hired to FTSE company boards has slowed and ‘complacency may again be setting in,’ warns new research from the Cranfield School of Management.
The first six months after Cranfield’s March 2012 Female FTSE Board Report saw an ‘extremely encouraging’ pace of change, with 44 percent of new FTSE 100 board appointments and 36 percent of FTSE 250 board appointments going to women, say researchers. Growth in this area was short-lived, however, dropping to 26 percent and 29 percent, respectively, over the last six months.
Burberry tops this year’s ranking with three women directors on a board of eight, including both the CEO and CFO roles, making it the only FTSE 100 company with two female executive directors. Diageo takes second place with four women out of 11 on the board, while Capita, GlaxoSmithKline and Standard Life all share third place with 33.3 percent female board representation each, says Cranfield in a press statement.
Across the FTSE 100 there are now only seven all-male boards, and 67 percent of firms have more than one woman on the board. The 194 female-held directorships at 93 FTSE 100 firms equates to 17.3 percent female representation, a slight increase on last year’s 15 percent, say researchers. When it comes to the ‘executive pipeline’, though – particularly executive director positions – the situation is less than positive, with the number of women on FTSE 100 executive committees falling from 18.1 percent in 2009 to 15.3 percent today.
‘Despite women dominating the fields of human resources, law and marketing, this is not reflected at executive director level, where the positions are still going to men who are being promoted internally over experienced female candidates,’ says Professor Susan Vinnicombe, co-author of the report, in the statement.
Researchers still maintain, however, that ‘if the FTSE 100 companies regain the momentum they achieved in the first half of last year, with one third of all new appointments going to women, the target of 25 percent female FTSE 100 board directors should be met in 2015.’
UK business secretary Vince Cable notes the overall progress that has been made. ‘Government continues to believe a voluntary-led approach is the best way forward,’ he says in the Cranfield press release. ‘But today’s report also serves as a timely reminder to business that quotas are still a real possibility if we do not meet the target.’
Vinnicombe adds: ‘At Cranfield we have stood fast against quotas on the basis that chairmen must understand the benefits of gender diversity and commit to achieving it. Undoubtedly a number of chairmen do get it and see a gender-balanced board as the ‘new normal’. Unfortunately, too many chairmen choose to ignore the issue in the false hope that it will go away.’
Talking about the European Commission’s proposed 40 percent target, which goes far beyond UK government plans, Vinnicombe says: ‘It is becoming a matter of urgency for those companies that do not have a gender-balanced board to let go of their board stereotypes and appoint more creatively.’