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Female representation on FTSE boards remains poor

Female representation on FTSE boards remains poor

Female representation on FTSE boards remains poor

There has been almost no movement in the number of women directors of the UK’s leading 100 firms in the last year, according to new research from Cranfield School of Management.  Women represent only 12.5% of members on FTSE 100 boards, marginally higher than the 12.2% figure a year ago.  The slight change is due to three more women being appointed to the board of the top FTSE 100 companies.

The annual Female FTSE board research shows that the proportion of female board members at FTSE 100 companies is just 6 percentage points higher than in 1999.   The research also puts FTSE 250 companies under the spotlight, where an unacceptable 52.4% (131) of companies have no women on their boards.  Just 7.8% of FTSE 250 board directors are women.

The authors are upbeat on forthcoming changes to the situation, as Lord Davies of Abersoch is expected to inform the government on the matter in February.  Report co-author, Dr Ruth Sealy said: “There is still too much female talent not making it to the boardroom.  Eighty-two of the FTSE 100 companies have women on their executive committees. These women are a rich resource pool for future board directorships. This pipeline of women continues to grow each year – there are now 2,551 women on the corporate boards and executive committees of all FTSE listed companies.”

This year the Cranfield Female FTSE report took a retrospective look at companies who have consistently performed well on gender diversity and those that have failed to make any progress. An analysis by sector proved that it does not account for the polarising trends regarding gender diversity of boards.  Professor Susan Vinnicombe OBE, co-author of the report said: “In our view chairmen overplay how the small size of boards can constrain gender diversity. Our report clearly demonstrates there is no correlation between board size and diversity. The top two companies in the Female FTSE 100 list are Burberry and Alliance Trust who have only eight and nine on their respective boards, yet manage to have three women directors each. Further afield, nearly 30% of new appointments to Australian boards this year, of which the average size is seven, have gone to women.”
 
The focus of Cranfield’s 2010 report was a series of interviews carried out by the report’s authors with 14 of the FTSE 100 Chairmen (representing 17 companies), asking about: their role in the NED appointment process, their response to the new UK Corporate Governance Code’s principle of paying ‘due regard to diversity on the board, including gender’ and how the challenge of getting more women on boards might be addressed.  It was clear from the interviews that the threshold for NED applicants is extremely high for both men and women. Chairmen commented on how the quality of candidates had risen and how the process has become more rigorous over the past few years. Most chairmen talked about the task of not just replacing the skills and knowledge of departing NEDs, but taking the opportunity to review NED requirements in the context of current business priorities and challenges for the company, and in light of the mix of skills and experience already in existence around the boardroom table.  Key themes from the interviews included: agreement that there is tangible value in having women on the board; that board evaluations do not take diversity into account; and that the development of women already in the pipeline is crucial.

Equalities Minister Lynne Featherstone said: “While I’m pleased to see the number of female-free boardrooms continuing to fall, it’s worrying that women – who make up more than 50 per cent of the population – still account for just one-eighth of FTSE 100 directors. Making boards more diverse is not about political correctness – it’s about making sure companies draw senior staff from the widest possible pool of talent, which is good for business, good for staff and good for customers. That’s why the Government is committed to working with employers to boost the number of women in Britain’s boardrooms.”

Women as Leaders programme at Cranfield

Cranfield offers a three-day residential Women as Leaders programme for experienced women professionals and managers who, for whatever reason, feel stuck in their careers, or feel that they would like to accelerate their careers.  Participants engage in stimulating research presentations, group discussions, a 360 degree leadership profile, co-counselling sessions, facilitation groups and leave with an elite network of women in business to work with in the future. 
Professor Susan Vinnicombe OBE, the programme leader, said:   “The programme integrates leading edge research with participants’ personal experiences to provide practical learning about leadership and ways to navigate your way to the top.  We help female managers to think positively about ambition, power, impression management and career success.”

For further information contact Mary Mills on tel: + 44 (0)1234 754502 or email m.k.mills@cranfield.ac.uk  or visit our website at www.cranfield.ac.uk/som/walw.

For details of all our programmes visit www.cranfield.ac.uk/som/hrde

 
11 January 2011

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