Gender diversity on FTSE 100 boards may be worse than thought, according to new study

Of the women appointed to FTSE 100 boards over a decade, 83 per cent were in non-executive roles that come with less influence than full-time positions

Emma Featherstone
Tuesday 31 October 2017 18:00
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Of 151 new chief executive appointments, just 7 per cent were women
Of 151 new chief executive appointments, just 7 per cent were women

Attempts to improve gender diversity on the boards of FTSE 100 firms are stalling and female representation may be worse than thought, according to new research.

A study into the boardroom appointments of FTSE 100 companies between 2006 and 2016 by data consultancy Beyond Analysis suggests that women assumed less than a quarter of key board appointments over the decade.

Beyond Analysis says that its findings contradict the five-year review of executive appointments by former Labour minister Lord Mervyn Davies, which was published in October 2015.

Paul Alexander, chief executive of Beyond Analysis, said: “When he published the results of his review, Lord Davies claimed that there had been a ‘near revolution’ in the boardrooms of Britain’s top companies, but that view is clearly undermined by what those firms themselves say.”

Beyond Analysis’s study, which reviewed more than 1,000 annual reports of businesses that had featured in the FTSE 100 between 2006 and 2016, showed that most board positions that women had taken up over the decade were either newly created roles or non-executive director positions, which was limiting the impact they could have on company policy or direction.

Over the decade, women had claimed only 22 per cent of all senior appointments and 83 per cent of those positions were non-executive roles. Less than 7 per cent of the 151 chief executive appointments in that time were women.

In Lord Davies’ 2015 report, called Improving the Gender Balance on British Boards, he said that women’s representation on the FTSE 100 had more than doubled to 26 per cent in less than five years, exceeding the 25 per cent target.

Beyond Analysis said that if you focus on women just occupying senior executive roles, the numbers are far less positive than the Davies report suggests. In 2006, women took up only 5.2 per cent of those positions. A decade later, the figure had only risen to 11.2 per cent.

“There is a risk that if Government does not refocus on this issue soon, a diversity campaign, which many regard as a priority, could stall completely,” said Mr Alexander.

In July 2016 the chair of the Government-backed Women on Boards Review, Sir Philip Hampton, admitted that the proportion of new board appointments going to women had fallen to a five-year low. Between September 2015 and March 2016, only 24.6 per cent of new board roles had gone to women, which was the lowest proportion since 2011.

Sir Philip said at the time that the lull in activity since he had been appointed in February 2016 was partly down to the Government’s wish to avoid distractions during the run-up to the EU referendum.

Mr Alexander said that Beyond Analysis’s findings emphasised that further effort was needed to secure change on company boards.

The findings from 1,046 annual reports are being converted into a digital tool that will allow businesses to track their progress on executive diversity.

Mr Alexander said that the improvements to gender diversity on boards so far, which have seen a limited number of women appointed to [significant] positions, might be seen by critics as “lip service, rather than great strides”. Beyond Analysis said the positions to which women were appointed were, almost without exception, non-executive. Although those in a non-executive board position advise, and can influence, colleagues as they are not in full-time positions the degree to which they can do so is limited.

For the six-month research project Beyond Analysis worked with David O’Brien who has had senior roles at companies such as Accenture, Siemens and Unisys.

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