One positive conclusion from the report, composed by Cranfield School of Management, City University London and Queen Mary University London, is that there are no all-male boards among FTSE 100 companies.
Diageo, Next and Kingfisher and Unilever lead the rankings with more than 42 per cent women represented on their boards. While 61 per cent of FTSE 100 have reached the previous 25 per cent Davies target, meeting the new 33 per cent target by 2020 would require that FTSE boards reach 27 per cent of women by 2016 – only 44 companies on the index have reached this milestone.
The overall percentage of women directors on FTSE 250 boards increased to 20.4 per cent compared to 18 per cent in 2015. Among these, Grainger, Halfords Group, JPMorgan American Investment Trust, Renewables Infrastructure Group, and Woodford Patient Capital Trust have achieved a 50-50 gender split on their boards.
In the meantime, only 36 per cent of FTSE 250 companies have reached the 25 per cent target, while 26.4 per cent of them have exceed the target with at least 27 per cent of women on their boards.
The findings indicate that the pace of progress has reduced to a crawl as only 24.7 per cent of new board positions were filled by women in the six months between September 2015 and March 2016 – the lowest since September 2011 – and board turnover rates have stagnated at an average 14 per cent.
The report also observed sluggish progression among executive ranks and in the executive pipeline, with female executive directorships standing at 9.7 per cent and at 5.6 per cent in the FTSE 100 and FTSE 250 respectively. The low figures inflate the concern that FTSE companies will struggle to reach the 2020 target.
However, the authors set out some strategies and key points of action (summarised below) to combat the stalling trend:
- Chairmen and search consultants must ensure that boards are continually refreshed and that we return to a board turnover rate of at least 14 per cent.
- Greater attention should be paid to the female pipeline and how they can encourage more women to take up operational roles.
- Using metrics and targets as tools to create a disciplined approach to gender balance and cultural change.
In addition to principles laid out above, the authors highlighted the need for ‘more robustness and transparency in reporting gender composition at Executive Committee level and below’, encouraging organisations monitor and report gender balance across all seniority levels.
Melanie Richards, vice chair at KPMG UK, said: “It is not one single person’s responsibility to drive this – the progress and success achieved thus far has been because of the collaboration and efforts of a large number of people and organisations which now needs to broaden further.
“For continued progress at pace, success should be a result of consistent efforts of everyone rather than the exceptional efforts of some. A big part of this is organisations monitoring and being transparent about data related to succession planning, promotions and recruitment.”
Professor Susan Vinnicombe CBE from Cranfield School of Management’s 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 per cent board target by 2020, chairmen and search consultants must ensure the board appointment process remains robust, transparent and gender-inclusive.”
The Female FTSE Board Report 2016 can be found here.
