Getting Women on Boards

Overall the news from Cranfield School of Management’s Female FTSE Board Report 2019 is good. But there are some serious underlying concerns.

“Since we started our report more than two decades ago, we have seen the number of women on boards increase from 6.7% to 32%. There has clearly been great progress on the numbers front but scratch beneath the surface and we suggest that some companies have simply been ticking a box,” says Professor Sue Vinnicombe, co-author of the report.

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DOWNLOAD Cranfield’s Female FTSE Board Report 2019

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The 2016 Hampton-Alexander Review set FTSE 350 businesses a target of 33% of all board and senior leadership positions to be held by women by the end of 2020. There is some way to go, but today’s figures show that if the rate of progress achieved since 2016 is maintained, then FTSE 100 companies at least should meet the 2020 target.

Less encouragingly, the latest Cranfield study reveals that behind the headline numbers too few women are still appointed to top leadership roles. While the percentage of women non-executive directors has increased, the number of NEDs being promoted into senior roles has not progressed at the same rate. The number of women executive directors is still disappointingly low – only 10.9% of FTSE 100 and 8.4% of FTSE 250 are female – and there are only 5 women chairing FTSE 100 boards.

These are the report’s key findings:

Gender diversity

• FTSE 100: the percentage of women on boards has increased from 29% to 32%, with 292 women holding 339 directorships. The percentage of female non-executive directors (NEDs) is at an all-time high of 38.9%, but the percentage of female executives is worryingly low at 10.9%
• FTSE 250: The percentage of female directors has risen from 23.7% to 27.3%, while the number of all-male boards has dropped to three. The percentage of female NEDs is 32.8%, but the percentage of female executive directors (EDs) is low at 8.4%
• On the FTSE 100, 48 companies have reached the target of 33% women on their boards. Kingfisher and Rightmove both have 50% female representation at board level, and Schroders is the most improved company in the top 10, with 45% women on its board, up from 27% in 2018
• On the FTSE 250, 88 companies have reached the target of 33% women on their boards, up from 59 last year
• The average tenure for female executive directors on FTSE boards is 3.3 years – half that of their male counterparts, who, on average, serve 6.6 years. The gap is slightly less at NED level, with the average tenure being 5 years for men and 3.8 years for women. Just 16% of women have been in an NED role for more than six years, raising the question of if they are choosing to leave or being pushed off the board.

 Wider diversity characteristics on the FTSE 100

• Only 11% of the women have a degree from Oxford or Cambridge. 76% have an undergraduate degree, and 35% of those also have a postgraduate degree.
• 13% of women directors hold a recognised financial qualification, something often associated with the criteria for a NED appointment. 22% hold an MBA degree, in which finance is a core subject.
• There is a high degree of financial literacy as 55% have held financial roles across finance, auditing, investment, treasury and banking.
• The majority of female directors are British (55%), with the remainder coming from 18 countries across the world.
• Only 11% are from Black or Ethnic Minority backgrounds.
• The average age of female directors is 57.3, approximately two years younger than male directors, whose average age is 59.2. The gap is slightly larger for NEDs – 57.9 for women and 61.5 for men. Which is surprising given that many women take career breaks, and may indicate that mature women are being overlooked for appointment to NED roles.