A new report suggests that UK-wide efforts to appoint more women to boardroom positions have slowed down.
Cranfield School of Management, which publishes a yearly report, found that in the first sixth months since 2012’s report, 44 percent of new board appointments to FTSE 100 companies went to women. A further 36 percent in FTSE 250 companies went to women.
Despite this impressive start, the last six months have seen a drop to 26 percent and 29 percent respectively – this is a 33 percent shortfall on Lord Davies’ recommendations, made in the 2012 report, to get women in 25 percent of all boardroom positions by 2015.
According to the 2013 figures, women hold 21.8 percent of FTSE100 non-executive directorships, but just 5.8 percent of executive directorships. In the FTSE 250, these figures are 16.6 percent and 5.4 percent respectively. In terms of raw figures, this translates to 18 female FTSE 100 executive directors (against 292 males) and 32 female FTSE250 executive directors (against 558 males).
Dr Ruth Sealy from Cranfield School of Management, who co-authored the report, said: "Lord Davies’ target for FTSE 100 companies is still in sight but only if the rate of new appointments going to women regains momentum promptly.
"Only a quarter (25 percent) of FTSE 100 companies have already achieved the target and the drop in the last six months is worrying.
"It is disappointing to see that women from outside the ‘corporate mainstream’, including entrepreneurs, academics and civil servants are still not being considered for FTSE board positions."
Ann Pickering, HR Director, Telefónica UK, commented on the findings: “While the overall number of women on boards since the Davies report was published in February 2011 has increased, as the latest figures show, there is a clear need to address the decline in pace of these appointments.
“Sustainable, long-term boardroom diversity will only be achieved if employers also focus on supporting women at the very start of their careers, not just at senior management level, to create a pipeline of talent. Whether it’s through offering mentoring, training or even flexible working, businesses have a responsibility to inspire and support all of their people to achieve their potential regardless of the stage of their career.”
Business Secretary Vince Cable reiterated the Government’s commitment to self-regulation, but said that mandatory targets are a ‘real possibility’ if the UK fails to reach Lord Davies’ 25 percent target.
Cable said: “Government continues to believe that a voluntary led approach is the best way forward. 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 of 25 percent of women on boards of FTSE companies by 2015.”
Cable has also written to 27 percent of FTSE250 firms that currently lack any female representation in the boardroom, telling them to take action. He said that the issue was not only about gender equality, but about improving the “performance and productivity of companies.”
Eilidh Wiseman, Partner at law firm Dundas & Wilson, is against mandatory quotas and believes that voluntary action is the only way in which real change can be made. Although the government aligns itself with this view in public, she feels that it has actually been far more interventionist in its actions. Her view on today’s report (in a kind of school report fashion) is “promising start, but could do better”.
"From a positive perspective boardroom equality is now out there as a mainstream issue," said Eilidh. "Initial steps have been taken to improve the gender balance of boards. The next step is much harder in terms of moving from the quick wins of recent female appointments, to looking at lasting change. This would involve not only a broad talent pool of senior and experienced women, but also fairness and transparency becoming the norm for senior appointments at non-executive and executive level.
“The focus must be on the pipeline and cultivating experience and skills that enable women to gain access to these senior roles on merit. While targets or quotas provide a focus and a measurement tool they are not a solution in themselves. Whatever your views are on whether the barriers to leadership arise from internal issues (of the type favoured by Sheryl Sandberg, author of Lean In) or wider structural barriers on workplace culture and employee output, we should not be complacent that real change will involve a combination of factors and a genuine desire to make progress.
"This type of incremental change also falls squarely within the government’s nudge agenda – this theory that people will be more willing to change their behaviour through gradual change rather than being forced to change through legislation. This obviously works better with some issues than others – seat belts being the classic example of legislation being required to drive behavioural change. It would be interesting to see what the psychologists in the No.10 "Nudge Unit" would recommend for improving the female talent pool at board level."