Women In Boardrooms: Firms 'Complacent' On Gender Gap, Says Cranfield Female FTSE Board Study

Why Firms Aren't Doing Enough To Get Women Into The Boardroom

Progress on appointing more women on to company boards has stalled, suggesting that firms have become complacent in tackling the issue, according to a new report.

The annual Cranfield Female FTSE board study showed that in the six months from last March the pace of change was "extremely encouraging", with 44% of new appointments going to women, and 36% in companies in the FTSE 250.

But the levels were short-lived, dropping to 26% and 29% in the past six months, showing a "considerable gap" from the recommendation of having 25% of women on boards by 2015, made by a Government-commissioned review led by Lord Davies of Abersoch.

The Cranfield International Centre for Women Leaders said there was a 33% gap between the current rate and the recommended level.

There are 194 female-held directorships, involving 169 women, in 93 of the FTSE 100 boardrooms, equivalent to 17.3% of the total, compared with 15% a year ago, said the report, leaving seven with all-male boards.

Dr Ruth Sealy from Cranfield School of Management, who co-authored the report, said: "Lord Davies' target for FTSE 100 companies is still in sight but only if the rate of new appointments going to women regains momentum promptly.

"Only a quarter (25%) of FTSE 100 companies have already achieved the target and the drop in the last six months is worrying.

"It is disappointing to see that women from outside the 'corporate mainstream', including entrepreneurs, academics and civil servants are still not being considered for FTSE board positions."

The analysis also revealed a "worrying drop" in the number of women on executive committees, down from 18% in 2009 to 15%.

Professor Susan Vinnicombe, who co-authored the report, added: "Despite women dominating the fields of human resources, law and marketing, this is not reflected at executive director level, where the positions are still going to men, who are being promoted internally over experienced female candidates."

Business Secretary Vince Cable said: "The argument for more women in our boardrooms is clear - they bring fresh perspectives and ideas, talent and broader experience which leads to better decision-making. This is not just about equality at the top of our companies. It is about good business sense.

"Some progress has been made in the last three years. Today 94 of the FTSE 100 companies count women on their boards as do over two thirds of all FTSE 350 companies. However, the momentum appears to be slowing and there has been much less progress in executive appointments at the top.

"Government continues to believe that a voluntary led approach is the best way forward. But today's report also serves as a timely reminder to business that quotas are still a real possibility if we do not meet the target of 25% of women on boards of FTSE companies by 2015."

Lord Davies said that two years after his review, a growing number of women were in decision-making roles in business, adding: "The onus was firmly placed on business to bring about this necessary change, and I am pleased to say that evidence clearly shows that they have, and are, stepping up and responding.

"They are making real efforts to find and appoint capable women to their boards. We are now moving to a place where it is unacceptable for the voice of women to be absent from the boardroom.

Sir Roger Carr, CBI President, commented: "These figures show if we are to remove blockages in the pipeline of female talent development, business leaders must roll up their sleeves and redouble their efforts to improve recruitment, mentoring and succession planning.

"Tokenistic EU quotas will do nothing to address the root causes of this issue. It is critical we nurture a diverse talent base right from the bottom to the top of our companies to hone our competitive edge."

Ann Pickering, human resources director at Telefonica UK, commented: "While the overall number of women on boards since the Davies report was published in February 2011 has increased, as the latest figures show, there is a clear need to address the decline in pace of these appointments.

"Sustainable, long-term boardroom diversity will only be achieved if employers also focus on supporting women at the very start of their careers, not just at senior management level, to create a pipeline of talent.

"Whether it's through offering mentoring, training or even flexible working, businesses have a responsibility to inspire and support all of their people to achieve their potential regardless of the stage of their career."

TUC General Secretary Frances O'Grady said: "While we welcome recent cross-party efforts to alter boardroom culture, this has not led to meaningful change. These figures make for depressing reading.

"The only way we will end the old boys' network is if the Government introduces compulsory quotas for the composition of boards, as recommended by the European Commission. Without this, female board members will continue to be a rarity."

Charles Elvin, chief executive of the Institute of Leadership and Management, said: "It is worrying to see that the steady progress made in improving female representation on FTSE 100 boards stagnated during the second half of the year.

"We believe in the need for gender diversity not only at board level but throughout organisations.

"We do not support the introduction of quotas, but recommend that organisations pursue the proven business benefits of a gender-balanced boardroom by focusing on developing female talent at all levels of their organisation, enabling natural progression to senior executive and board level in future years."

Minister for Women and Equalities Maria Miller said: "It is more important than ever that we make the most of the talents and skills that women have to offer if we're going maximise Britain's prospects for economic growth.

"We are making good progress: two thirds of women are in work, the gender pay gap is closing and both Lord Davies' and Cranfield's reports indicate that we are heading in the right direction when it comes to women's representation at senior levels.

"But there is much more work to do. The priority now is to maintain that momentum, not only within listed companies but across the economy as a whole."

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