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Latest figures released highlight further increases in the proportion of women on boards

  • Corporate Governance  Image

27 Mar 2014

A report published by Cranfield School of Management shows that the proportion of women on UK boards continues to increase. The report ‘The Female FTSE Board Report 2014 – Crossing the finish line’ (“the Cranfield report”) highlights that only 48 more board seats on FTSE 100 companies are required to be held by women in order to achieve 25 per-cent female representation by 2015 as set by Lord Davies in his report in February 2011. However, further effort is required if this is to be achieved.

The Cranfield report highlights that the increase has been driven by “considerable effort and a significant change in mindset” from investors, executive search firms and business leaders “all working together to bring about real change”.  However, although these results are positive, the Cranfield report warns that whilst there has been "good progress" in the proportion of new board appointments going to women this has "generally not been at the level required to reach the 25% target by March 2015".  To achieve this, would require that one third of all new board appointments go to women, a statistic that has recently been achieved in the last six months where female board appointments accounted for 35.5% of all board appointments.  Should the proportion stay at this recent level, the Cranfield report predicts that there will be 26.7% women on boards by 31 December 2015.

The Cranfield report has been published at the same time as Lord Davies publishes the third annual progress report into women on boards (link to BIS website) (‘Women on boards – Davies review annual report 2014’) (“the Davies report”) which outlines the progress achieved against each of the ten recommendations made in in his report ‘Women on Boards’ in February 2011 (link to BIS website).  These recommendations aimed to ensure that more women were appointed to boardroom positions.

The key findings in the Cranfield report, which are consistent with latest statistics released by the Professional Boards Forums’ BoardWatch (link to Professional Boards Forum BoardWatch website) are:

  • The percentage of female-held directorships on FTSE 100 boards has increased to 20.7% in March 2014, 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 15.6% in March 2014, up from 13.3% in March 2013 and 7.8 per-cent as of February 2011 when Lord Davies reported.
  • There has been a decrease in the number of all-male boards in the FTSE 100 from seven in March 2013 to 2 in March 2014.   The number of all-male boards for FTSE 250 companies has decreased from 67 in March 2013 to 48 in March 2014.
  • The number of companies with at least 25% women directors in the FTSE 100 as of March 2014 is 36 (up from 25 in March 2013) and the equivalent number for FTSE 250 companies is 51 (up from 36 in March 2013).

To further enhance the chances of achieving the 25% target, the Cranfield report proposes five strategies one of which is to increase the boards of FTSE 100 companies with less than 25% women directors to 11 members (the average size of FTSE 100 boards) and to fill those additional seats with women.  The Cranfield report highlights that “this strategy alone would add another 56 female directors” which would be more than the 48 required to achieve the target set by Lord Davies.

These findings support continued progress against the recommendations made by Lord Davies in 2011. The Cranfield report indicates that “we are within sight of the 25% target on the FTSE 100 boards in 2015".  Lord Davies comments that “the home straight is in sight”.  Whilst incorporating the findings of the Cranfield report in his report he comments that “over the last year we have seen many positive steps to improve women’s representation in the Boardroom”.  However he reiterates the message in the Cranfield report that “although we have come a very long way since 2011, continued and concerted effort is still needed if we are to reach the 25% target we set by 2015”. 

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