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Boardroom Diversity Risks Going Into Reverse Gear as Lord Davies Spotlight Dims

12/11/2015 12:22 GMT | Updated 11/11/2016 10:12 GMT

The final Lord Davies report into the gender diversity of Britain's boardrooms revealed that the number of women on FTSE 100 boards increased from 12% in 2011 to 26% in 2015. This achievement was rightly heralded as a major triumph.

But, without wishing to put a dampener on things, I'd argue that we are actually entering a hugely critical time for boardroom diversity in Britain. There is absolutely no room for complacency, and here's why.

If you look specifically at the number of female Non Executive Directors (NEDs) serving in Britain's boardrooms, on the surface things look pretty rosy. The number of female NEDs in the FTSE 100 currently stands at 31.3% of the total.

But this situation looks much more precarious if you fast forward 18 months. In fact, it's possible that the percentage of female non exec directors on boards will fall from 31% to 26% over the next 18 months. In a worst case scenario this could fall as low as 17%.

This is because, as our recent analysis at Audeliss shows, female NEDs only average 5.5 years tenure, meaning we're fast approaching a period when many of the current leaders will stand down. A similar picture is found when analysing the wider group of 350 FTSE indexed companies.

Just one example of a female NED who is soon to be lost is Kate Swan, former Chief Executive of WH Smith - currently a non-exec director on the board of Babcock International. She has decided to retire from the board with effect from 31 December, ahead of the end of her second term.

This wouldn't be an issue if there was a strong pipeline of female executive talent emerging to replace the current generation of boardroom leaders. But the reality is that the number of female executive leaders is worryingly low. In the FTSE 100, it stands at 9%. For the FTSE 250, the percentage is 5% and in the FTSE 350 it is 7%. This worries me.

Huge strides have been made to improve boardroom diversity in the past few years. This is a direct result of concerted government pressure, corporate action, pressure group activity and efforts from executive search firms, like Audeliss, in sourcing diverse talented candidates. Research has also proven that companies perform better when they have at least one female executive on the board, helping strengthen the business case for change. So why the lack of attention on the female talent pipeline?

To ensure all of this work doesn't go to waste, we need ongoing pressure to sustain and improve on today's position. We need companies to focus on nurturing the next generation of female talent with executive leadership programmes and by allowing more flexible working arrangements and other family-friendly policies.

Without this, and as the Government spotlight from Lord Davies dims, there is a very real danger that companies could go into reverse gear in terms of their boardroom diversity.