“We are tantalisingly close,” said Denise Wilson, chief executive of Lord Davies’ steering group on women on boards. “There has been a real change in culture in the UK’s top boardrooms.”
Thirty six FTSE 100 companies have already reached the target of a quarter of the board being women, and a further 19 have between 20% and 25% of women on their boards. Two – Diageo and Capita – are setting the pace with 44.4% female representation, while newcomer Royal Mail is showing more established FTSE 100 companies the way with 36.4%.
The annual Cranfield research, which is produced by centre director Professor Susan Vinnicombe, reveals that over the past year, the number of women FTSE 100 board members has risen to 205 or 20.7% of the total (up from 17.3%).
Together they hold 231 directorships on all but two of the 100 boards. Only Glencore Xstrata and Antofagasta are left with all-male boards.
This represents a huge shift from three years ago when Lord Davies challenged the UK’s top companies to recognise the benefits of gender equality in the boardroom and appoint women to at least 25% of boardroom positions by 2015. In 2011 just one in five of the FTSE 100 boards were all male.
The number of women on FTSE 250 boards is also increasing rapidly. Those figures have doubled to 15.6% since 2011 (7.8%).
Vinnicombe says that it is encouraging to see the figures moving in the right direction. However, she is disappointed that, despite there being “a wealth of candidates”, many of the appointments are to non-executive roles, rather than to executive positions.
In the last year there were 52 new female appointments to FTSE 100 boards (27% of all appointments) but only five were as executive directors.
Throughout all FTSE 100 and 250 companies, women occupied 826 non-executive (NED) positions – the highest ever – and 291 executive positions – the lowest ever.
“These figures show that the likelihood of women being appointed to executive director positions is decreasing,” Vinnicombe says. “Therefore while it is important to meet the 25% target, we need sustainable change that will ensure diversity on our boards in executive positions as well as NED roles.”
Report co-author and visiting fellow Elena Doldor thinks that closing the gap at executive level will require companies to invest much more effort in developing the pipeline of female talent.
“Effective talent management will only happen if leaders and managers are held accountable for supporting women’s careers by introducing performance targets related to developing female talent and linking them to remuneration.
“Organisations should also ensure that women have not only mentors, but also sponsors, who advocate for them and pave the way to career-enhancing opportunities. We want all FTSE companies to ask themselves are talented women within their organisation able to get to the top and around the boardroom table? If not, they must review their talent management processes to enable this.”
The report recommends a number of strategies for companies to adopt to achieve the cultural change that will see many more talented women reach the top.
Chairmen and executive search firms should consider women from outside the corporate sector, it suggests, while FTSE companies should review the size of their boards, increase the number of positions to 11 (if fewer than that) and aim to appoint women to the new seats.
Chairmen should review the tenure of their non-execs, it suggests. Currently there are 82 on FTSE 100 boards (all men) who have held their seat for over nine years, which contravenes the Higgs Corporate Governance Guidelines.
Finally, it wants FTSE companies to increase the number of women at senior executive level, since this provides a direct pipeline to the board.
This last is really important, said Estelle James, director at recruitment firm Robert Half. “It should always be the best person for the job – but offering the right career path and development opportunities coupled with more flexible working options will result in a larger pool of women ready to take their rightful seat at the boardroom table.
“We only have three female chief executives in the FTSE 100, so seeing more in the next few years should be a priority.”
PwC’s executive board member and head of people Gaenor Bagley agreed. "This is about companies challenging the norm, measuring women against their own goals rather than enforced stereotype and asking why more women aren’t coming through to promotion," she said.
“Only through closer monitoring and challenging of gender differences at every stage of careers will companies understand what changes they need to make to bring about sustained change.”
The success of the voluntary approach is all the more important because the European Union is planning to introduce quotas to force boardrooms to have 40% women, something that is widely regarded as an unattractive option in the UK. As Lord Davies points out, “The rate of change that we have seen at the heart of our biggest companies over the last three years has been impressive.
“The voluntary approach is working and companies have got the message that better balanced boards bring real business benefits. We are finally seeing a culture change take place at the heart of British business.
“However, the eyes of the world are on us as we enter the home straight. They are judging us as to whether the voluntary approach, rather than regulation, will work – we need to now prove we can do this on our own.”