July 11, 2019
Although the percentage of women on boards at FTSE 100 firms is on track to reach 33 percent by 2020, a new report claims there are worrying signs that companies are appointing women for symbolic value. The Female FTSE Board Report, produced annually by Cranfield University’s School of Management, claims that women serve shorter tenures than men (on average, female non-executive directors serve 3.8 years – with men serving 5 years) and are less likely to get promoted into senior roles.
In this year’s report, the authors looked ‘beyond the numbers’, investigating the true diversity of women appointed to FTSE boards, as just 11 percent of women on boards are from Black, Asian or other Minority Ethnic backgrounds. They researched their age, nationality, ethnicity and educational backgrounds, comparing age and tenure to that of their male counterparts.
We need urgent action to make sure that women are being appointed to boards on and recognised for their contribution and not simply for symbolic value
Sue Vinnicombe, Professor of Women and Leadership at Cranfield University, and lead author of the report, said: “Since we started our report more than two decades ago, we have seen the number of women on boards increase from 6.7 percent to 32 percent. There has clearly been great progress on the numbers front but scratch beneath the surface and we suggest that some companies have simply been ticking a box.
“There is mounting evidence that women have shorter tenures and are less likely to be promoted into senior roles than their male counterparts. The number of women in Chair roles has decreased this year. We need urgent action to make sure that women are being appointed to boards on and recognised for their contribution, and not simply for symbolic value.”
Dr Doyin Atewologun, co-author of the report and Director of the Gender, Leadership and Inclusion Centre at Cranfield, says: ”Although it is positive to see more women on boards, we need to be sure that we are not only advancing progress for a certain group of women, but are truly pushing board diversity in every sense.”
Dr Atewologun has compiled the Women to Watch supplement to the Female FTSE Board Report, highlighting 50 inspiring senior women business leaders from Black, Asian and other Minority Ethnic (BAME) backgrounds who are ideally suited to board positions on FTSE 350 companies now or in the near future.
The report, which focused on the 12 months up to the end of June 2019, claims:
- FTSE 100: the percentage of women on boards has increased from 29 percent to 32 percent, with 292 women holding 339 directorships. The percentage of female non-executive directors (NEDs) is at an all-time high of 38.9 percent, but the percentage of female executives is worryingly low at 10.9 percent
- FTSE 250: The percentage of female directors has risen from 23.7 percent to 27.3 percent, while the number of all-male boards has dropped to three. The percentage of female NEDs is 32.8 percent, but the percentage of female executive directors (EDs) is low at 8.4 percent
- On the FTSE 100, 48 companies have reached the target of 33 percent women on their boards. Kingfisher and Rightmove both have 50 percent female representation at board level, and Schroders is the most improved company in the top 10, with 45 percent women on its board, up from 27 percent in 2018
- On the FTSE 250, 88 companies have reached the target of 33 percent women on their boards, up from 59 last year
- The average tenure for female executive directors on FTSE boards is 3.3 years – half that of their male counterparts, who, on average, serve 6.6 years. The gap is slightly less at NED level, with the average tenure being 5 years for men and 3.8 years for women. Just 16 percent of women have been in an NED role for more than six years, raising the question of if they are choosing to leave or being pushed off the board.
Wider diversity characteristics on the FTSE 100
- Only 11 percent of the women have a degree from Oxford or Cambridge. 76 percent have an undergraduate degree, and 35 percent of those also have a postgraduate degree.
- 13 percent of women directors hold a recognised financial qualification, something often associated with the criteria for a NED appointment. 22 percent hold an MBA degree, in which finance is a core subject.
- There is a high degree of financial literacy as 55 percent have held financial roles across finance, auditing, investment, treasury and banking.
- The majority of female directors are British (55 percent), with the remainder coming from 18 countries across the world.
- Only 11 percent are from Black or Ethnic Minority backgrounds.
- The average age of female directors is 57.3, approximately two years younger than male directors, whose average age is 59.2. The gap is slightly larger for NEDs – 57.9 for women and 61.5 for men.