A Decade of Delay for Women Directors

Ten years on from the first Cranfield Female FTSE Report, the number of directorships held by women on FTSE 100 corporate boards has risen by only five percentage points.

The 2008 Female FTSE research by Cranfield School of Management reveals a slight increase bringing today’s total to 131 (12%).  Ten years ago the report revealed there were 79 (7%) female-held directorships on the FTSE 100 boards.

Although the increase is alarmingly small there are some encouraging underlying shifts in this year’s report. There was an increase in women CEOs to five in the FTSE 100 and an additional three more divisional or regional CEO posts held by women, which is an all-time high.  There are now two female Chairman of FTSE 100 companies and 17 female executive directors.  The number of female women holding these directorships totals 113, up from 66 ten years ago.

The most promising increase is in the number of companies with multiple women on the board. 39 companies have two or more women on their boards compared to just 13 a decade ago.  Surprisingly it is the oil, gas,  mining and electricity industries which do not have a large concentration of women employees that have more women in their top executive posts than sectors, like retail, that do employ a preponderance of women employees.

Top of this year’s index is Alliance Trust which is new to the FTSE 100, which has three women (43%) on its board of seven, uniquely including a female Chairman and a female CEO.  AMEC and Marks and Spencer come next, both with 33% female boards. 

Harriet Harman, Minister for Women and Equality, said:

"Many British boardrooms are still no-go areas for women. Women are important consumers and employees. What does it say to women in a company if all the key decisions in the boardroom are taken by men.

"Britain needs women in the boardroom. We’ll never get truly family-friendly workplaces from male dominated boards. This year’s Female FTSE index is a reminder that we have come a long way, but have much further to go."

Report co-author Ruth Sealy said:

“In comparison to the 1999 figures, the most significant increase is in the number of companies with multiple women on their boards – 39 of the FTSE 100. It is only once a critical mass of women in the boardroom is attained that real culture change can occur.

“This year for the first time we looked at the companies of the smaller listings to see if they have more female-friendly boards, considering the demographic composition of boards in the FTSE AIM, SmallCap, Fledgling and Techmark listings. The FTSE 100 has just under 12% female-held directorships, and the FTSE 250 has just 7.2%. For the smaller listings, women’s representation on the board is a very disappointing 5-6%, clearly belying the myth that it is easier for a woman to become director of a smaller firm. We identified 1,877 women on the boards and executive committees of smaller listed companies, a huge pipeline of talent to feed the larger FTSE boards.”

Co-author Dr Val Singh said:

“In 1999 we asked if CEOs believed the female talent pool was too small. This 2008 Report shows that there is a considerable number of well qualified and ambitious women waiting for opportunities to contribute.”

The report, also for the first time, includes the findings from a study into women from FTSE 350 executive committees.  The results show overwhelmingly that women are ambitious with 80% of women directors wanting to obtain a NED position in a FTSE 350 company.

Unfortunately the research also highlights how many of them feel over looked by chairman and search consultants for NED appointments. Women directors are pessimistic about the future, predicting that in five years time only 14% of directors of FTSE 100 companies will be women.

Commenting on this year’s results Professor Susan Vinnicombe OBE, co-author of the report said:

“The small increase in the percentage of women directors in the FTSE 100 companies over the past ten years has caused women to be pessimistic about the future.  This situation demands positive action.”

Of the 149 new appointees to the FTSE 100 boards in the last 12 months, only 16, a mere 10.7% were women. Most concerning is that there are still 22 companies that have exclusively all-male boards.

After ten years of such little progress, the report’s authors have decided to clearly set out actions that need to happen to achieve gender diversity on top corporate boards. The recommendations are:

• All directorships in the private sector must be advertised (as occurs in the public sector).
  
• Long lists for director appointments should reflect an aspirational target of 30% female candidates.
  
• Search consultants must be more proactive in building relationships with potential female NEDs.
  
• Companies should set gender targets and report on progress in annual reports, including setting and monitoring of KPIs at each level of the pipeline.
  
• Consideration should be given to female candidates for new board positions in recapitalised banks.