Blog by Kathryn Nawrockyi, Acting Director Opportunity Now
Two years on from Lord Davies, the Cranfield International Centre for Women Leaders has released its 2013 Cranfield Female FTSE board report.Opportunity Now partners with Cranfield, and we will recognise the company that achieved the most women on boards at our annual Awards Dinner next week on Wednesday 17 April.
Yesterday’s figures show that, despite significant progress since 2011, the pace of change has plateaued. The number of new FTSE 100 and FTSE 250 board appointments going to women has dropped considerably to 26% and 29% respectively, over the last six months.
Cranfield predicts that the FTSE 100 is on course to reach Davies’ target of 25% women on boards by 2015, if companies continue to push on progress.
At the launch event, Lord Davies pointed out that “like all big social change programmes, halfway through the change management you can’t take the foot off the gas pedal.”
We must avoid complacency. The only way to avoid Viviane Reding’s EU quotas is for UK companies to reach the required levels of women’s representation through the Davies approach.
“ Like all big social change programmes, halfway through the change management you can’t take the foot off the gas pedal. ”
Opportunity Now supports the Davies “comply or explain” approach to women on boards. Our focus is on building the talent pipeline of the future, through unbiased reward, recognition for all, and creating agile workforces. We will continue to support leading organisations, such as Helena Morrissey’s 30% Club, to drive it forward. Throughout the debate at the Cranfield launch event, several key actions were highlighted by the speakers, including, Sir Roger Carr, president of the CBI, Mark McLane, Head of Global Diversity and Inclusion for Barclays PLC, and Professor Susan Vinnicombe OBE and Dr Ruth Sealy of Cranfield:
- Continue the drive for organisational and cultural change, not quotas
- Accountability for diversity integrated at every level of an organisation, driven from the top and from investors
- Tackle the executive pipeline
- Need to spread the net beyond just the FTSE 100
There was also discussion about the lack of ethnic minority women on the boards of FTSE 100 and FTSE 250 companies, and in the talent pipeline – with few ethnic minority women included in the ‘100 Women to Watch’. There is a need for a more visible debate on underrepresentation of ethnic minority women in leadership; our sister campaign at Business in the Community, Race for Opportunity, works with employers on just these issues, promoting diversity on boards and at senior level.
As the central architect behind this concerted drive for greater gender parity on boards, Lord Davies brings valuable insight into what he believes are the three outstanding priorities, for which employers have to take responsibility:
1. Work / life balance - making the agenda a gender issue, not just a women’s issue
2. Child care - supporting all working parents and providing greater workplace flexibility
3. Executive pipeline - if the target of 25% women on boards is achieved by 2015, this figure would be heavily weighted towards non-executive directorships (NEDs) over executive directorships (EDs), meaning that internal executive pipelines are still not progressing women equally.
Addressing the executive pipeline to improve female representation in leadership was a clear take away, with the highlighting that: “in terms of paths to executive roles, whilst 48% female Executive Directors were internally promoted the equivalent percentage for men was 62%. This bias forces women to seek promotion in other companies.”
In previous years, there has been considerable pressure on executive search firms to take responsibility for diversity of selection pools and there is a clear sense that this has been heeded. Of the 48 women who took up new directorships on FTSE 100 boards, 31 had no prior FTSE 350 board experience, a strong indication that executive search firms - and selection committees alike - are thinking more creatively and have re-evaluated the traditional experience requirements.
More than 25 years of research and experience mean that at Opportunity Now we know the key ingredients for organisational culture change. There are a myriad of effective initiatives that an organisation can implement, but the following elements are essential if they are to succeed:
- Senior led commitment - change can only be effected by senior leaders acting as agents for change
- Monitor and measure data - only by understanding workforce metrics can organisations target, deliver and achieve real change
- Accountability - integrated into review processes for senior teams, and throughout the organisation
- Re-evaluate the executive pipeline - just how open and fair is it in identifying and progressing women?
Here are some key stats taken from the 2013 Cranfield Female FTSE board report:
- The number of women holding FTSE 100 board seats is 169 (holding 194 seats), an increase of 28 on the 2012 figures
- Overall, 17.3% of board directorships are held by women, a 2.3% uplift on 2012
- The percentage of new appointments on FTSE 100 boards going to women in the first six months since March 2012 peaked at 44%
- The percentage of new appointments on FTSE 100 boards going to women in the second six months since March 2012 dropped to 26%
- 5.8% of EDs are held by women compared to 21.8% NEDs
- In the 12 months to January 2013, 48 women took up new roles on FTSE 100 boards. Of these 48, 31 women (64%) have had no prior FTSE 350 board experience
- There still remain 6 FTSE 100 companies with all-male boards, all from the mining sector
- 73% (183 companies) of FTSE 250 companies now have women in their boardrooms. An increase from 54% in 2012
- The percentage of new appointments on FTSE 250 boards going to women in the first six months since March 2012 peaked at 36%
- The percentage of new appointments on FTSE 250 boards going to women in the second six months since March 2012 dropped 29%
- Despite the increasing numbers of women, the average board size of FTSE 250 companies has come down slightly from 8.1 to 8.0, disputing any myths that companies must make their boards bigger or that there is no room for women due to the smaller size of FTSE 250 boards
Seven of the 2011 ‘100 Women to Watch’ gained a FTSE 350 board position in the past 12 months, including Opportunity Now’s Chair, Alison Platt CMG, Divisional Managing Director, Europe & North America at Bupa, who joined the board of Cable & Wireless Communications plc as a non-executive director in June 2012.