Cranfield School of Management argues the number of women on boards is still below target for the UK's biggest listed companies, while figures also show female directors don't last as long in top jobs as their male counterparts
A lack of progress in introducing women on boards among Britain’s biggest publicly-listed firms has been criticised in a new report.
Cranfield School of Management said gender diversity within FTSE 350 companies remained scarce.
Despite making ground in female representation on non-executive board positions, the Female FTSE Board Report 2018 identifies a lack of women in executive roles on board of the UK’s leading businesses – while male directors also outlast their female counterparts by almost two years on average.
Professor Sue Vinnicombe CBE, professor of women and leadership at Cranfield School of Management, part of Bedford-based Cranfield University, said: “Now, more than ever, is the time for disruptive change.
“We need to think big and act decisively in order to move the needle.
“FTSE 350 companies need to treat gender diversity as seriously as they treat sales, risk management and innovation, otherwise nothing will change.”
Largest businesses offer better opportunities for women on boards
The FTSE 100 has a government-backed target to achieve 33% female representation on board by 2020.
In a 48-page detailed analysis, experts from the school’s International Centre for Women Leaders scrutinised data provided by the FTSE 350 companies to determine how close they are to reaching targets, but also how influential women leaders actually are in boardrooms.
The report’s analysis showed:
- FTSE 100 – while women occupy 35.4% of non-executive positions, an all-time high, female executive positions have flat-lined for a fourth consecutive year at 9.7%. Despite this, the proposition of women on boards has increased from 27.7% in October 2017 to 29% in June 2018.
- FTSE 250 – the number of female executive directorships dropped from 38 to 30 between October 2017 and June 2018. There has also only been a marginal increase in the number of women on boards, from 22.8% in October 2017 to 23.7% in June 2018.
- FTSE 100 and the gender pay gap – the top ten companies for the proportion of women on boards reported a slightly lower average gender pay gap than the bottom 10. The two best companies were drinks giant Diageo (55% women on boards and 4.1% gender pay gap) and pharmaceuticals conglomerate GlaxoSmithKline (45% women on boards and 2.8% gender pay gap).
- Female directors are on average nearly two years younger than their male counterparts but serve for less time and have an average tenure of 3.7 years compared to 5.4 years for men.
More ambition needed to increase number of women on boards
One of the authors of the Female FTSE Board Report was Aviva’s chief people officer Sarah Morris, who has also had roles at Thomson Reuters, BP, RSA and Dixon Carphone.
She said: “There has been some progress over the last 20 years, and it’s encouraging to see the biggest companies in the UK on track to hit the 33% target.
“But that is still only 33%. The benefits of greater diversity are clear so now it’s up to the FTSE 250 to increase their ambition.
“Still too little is being done to change the cultures which prevent talented women staying and rising to the top. We urge companies to act faster, for the sake of their people and their business.”
Co-author Professor Ruth Sealy, director of Exeter Business School’s Centre for Leadership, added: “The lack of diversity amongst executives of so many FTSE companies, even in functions which have balanced or majority female intakes, reveals such poor management.
“Organisations must now be bold and decisive in designing senior roles and careers fit for the 21st century in order to optimise the available talent.”
Recommendations for getting more women into boardrooms
Cranfield School of Management argues that functional heads – the most senior management rank below board level, including roles such as HR director and communications director – are too-often overlooked for executive positions.
This is because those roles are traditionally deemed to be too narrow in focus, with the people occupying them believed to lack operational experience and business acumen.
But the report said companies should recognise:
- The added value of functional heads on executive committees and consider them more seriously as an important pipeline of executive and non-executive board talent.
- That men and women may express leadership aspirations in different ways to ensure that not only those that naturally “claim” leadership roles are given the chance to step up.
- The critical role sponsors, organisational cultures and inclusive talent processes play in forming and affirming leaders.
Dr Elena Doldor, senior lecturer at Queen Mary University and visiting fellow at Cranfield School of Management, led interviews with functional directors on FTSE 100 executive committees.
She said: “Our interviews show that men and women have different experiences of progressing into senior leadership roles.
“Developmental organisational cultures and sponsors were critical to the career progression of the senior women we interviewed. Leadership does not emerge in a vacuum.
“If companies are serious about developing the female executive pipeline, they should ensure that their organisation truly enables talented women to flourish as leaders.”