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Latest progress report on women on boards published

  • Corporate Governance  Image

07 Nov 2013

Figures published today show that the proportion of women on UK boards continues to increase. The progress report ‘Women on Boards: Benchmarking adoption of the 2012 Corporate Governance Code in FTSE 350’, published by Cranfield School of Management also highlights that whilst progress has been made in adopting the diversity provisions in the 2012 UK Corporate Governance Code “it is a little disappointing that a greater proportion of the companies analysed have not fully responded to the new code stipulations in relation to reporting on diversity, in particular pertaining to gender”.

The progress report highlights that figures for women on boards and in senior management within FTSE 250 companies are “catching up” with those at FTSE 100 companies.  Findings also highlight that although further appointments are still required in order to achieve the 25 per-cent female representation by 2015 set by Lord Davies in his report in February 2011 (link to The Department for Business, Innovation and Skills website), the 25% target is “in sight”.

The key findings (compared against the April 2013 Cranfield School of Management report ‘The 2013 Female FTSE Report: False dawn of progress for women’) (link to Cranfield School of Management website) were:

  • The percentage of female-held directorships on FTSE 100 boards has increased to 18.9% in October 2013, up from 17.3% in March 2013 and 12.5 per-cent as of February 2011 when Lord Davies reported.
  • The percentage of female-held directorships on FTSE 250 boards has increased to 14.9% in October 2013, up from 13.3% in March 2013 and 7.8 per-cent as of February 2011 when Lord Davies reported.
  • Against these improvements, there has been a slight increase in the number of all-male boards in the FTSE 100 which has increased from seven in March 2013 to six in October 2013.  The number of all-male boards for FTSE 250 companies has decreased from 65 in March 2013 to 51 in October 2013.
  • The rate of new appointments to women in the FTSE 100 companies is currently at 27% and the progress report highlights that if this level is maintained “the headline figure (currently at 18.9%) is unlikely to hit Lord Davies’ target of 25%”.  The progress report identifies that the percentage of female-held directorships could hit 24% by 2015 if the rate of new female appointments increases to 35% and turnover remains at 13%.  The current rate of new appointments to women in FTSE 250 companies is higher in the FTSE 250 at 29.3%.

These findings are consistent with statistics released by the Professional Boards Forums’ BoardWatch in October 2013.

The annual reports of all FTSE 100 companies and “a subset of 50 organisations” within the FTSE 250 were analysed to determine compliance with the requirements of the 2012 UK Corporate Governance Code (“the Code”) on gender and diversity reporting. 

The amendments to the Code in 2012, which expanded the diversity provision require companies to set out clear disclosures on diversity, including gender, any measurable objectives that they have set for implementing the policy, and progress on achieving the objectives.  The Code was also amended so that boards would consider diversity when evaluating their effectiveness.

The progress report highlights that there was “little change from last year” for FTSE 100 companies but that, for those FTSE 250 companies sampled, “the picture appears to be worse”:

For FTSE 100 companies, 65% had stated a clear policy on boardroom diversity and 42% had set measurable objectives to increase the percentage of women on their board.  However, only 27% of companies addressed diversity in their board evaluation process and only 30% of companies demonstrated clear policies or measures aimed at increasing the number of women in senior management.  In contrast, only 18% of FTSE 250 companies sampled had stated a clear policy on boardroom diversity with just 14% of companies having set measurable objectives to increase the percentage of women on their board.  The progress report also identifies that just 2% of companies demonstrated clear policies or measures aimed at increasing the number of women in senior management and 24% of companies addressed diversity in their board evaluation process.

The FRC comment that they are “pleased to see in the report an upward trend in the rate at which female directors are being appointed and hopes to see similar progress in the quality of reporting next year”.

Along with the requirements of the Code, companies are facing additional pressures to address diversity and gender imbalance from areas such as the new UK 'Narrative Reporting' Regulations and the EU Capital Requirements Directive IV (CRD IV). 

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