FTSE companies have today been praised for making some progress in putting women in board-level positions, but it was stressed that more work needs to be done if boardroom diversity is to be achieved at the rate proposed by the Government.
Speaking at an event to promote the publication of Cranfield University School of Management’s Women on boards six-month monitoring report, minister for equalities Lynne Featherstone highlighted the need for FTSE employers to embrace diversity in order to improve their business performance and help to boost the UK economy.
Echoing recent comments made by chair of the Equality and Human Rights Commission Trevor Phillips, Featherstone said: “This Government’s priority is to get the economy back into shape. That means dealing with the deficit and stimulating growth. Better use of women could be worth between £15 billion and £23 billion each year, and research shows that companies with higher proportions of women on their boards perform better than their rivals.”
The Cranfield report analyses the progress made by FTSE companies against the recommendations made in Lord Davies’ original report from February, and it highlights the steps that some have taken to address gender imbalance at boardroom level. For example, it found that 22.5% of new FTSE 100 directorship appointments in 2011 have gone to women, compared to 13.3% last year and 14.7% in 2009.
In addition, the number of all-male FTSE 100 boards has dropped to 13 from 2010’s figure of 21, and, for the first time, a minority of FTSE 250 companies now have all-male boards.
A significant finding of the Cranfield report is the fact that a high proportion of female appointments to FTSE boards have been made despite those women having no prior FTSE board experience, a finding which suggests some FTSE employers have reviewed their sourcing processes in order to facilitate a more diverse recruitment strategy. The report found that 72% of new FTSE 250 female directors had no prior FTSE experience.
However, Professor Susan Vinnicombe OBE, co-author of the Cranfield report, pointed to the fact that many female board appointments were still required to have banking and finance experience, and urged employers to shake off the “straitjacket” of such a requirement, reminding them that other types of sector experience should be considered equally important.
Urging employers to consider women’s boardroom representation as a business performance issue and not just a matter of diversity, Lynne Featherstone said: “The most forward-thinking businesses are committed to offering more opportunities for women. If you look around, the best companies have the best diversity policies, the best flexible policies and the best bottom line.
“If you can demonstrate business performance through diversity, it is more likely to be accepted – real and long-lasting change can only come about when business leads the way.”
Featherstone also reminded employers of the possibility of compulsory boardroom diversity quotas being introduced and said: “We are not asking for quotas – neither I nor my colleagues want quotas,” but she told the audience how EU commissioner Viviane Reding had recently reiterated the possibility of quotas being introduced if companies did not voluntarily achieve boardroom equality in line with expectations.
At the event, Featherstone also confirmed that, so far, 22 executive search companies have signed up to a voluntary code of practice for diversity, and Susan Vinnicombe said that Cranfield will soon begin work on a report looking into the impact of the code on board-level appointments.