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Latest figures released highlight further increases in the proportion of women on boards but more needs to be done to achieve 33% target

  • Corporate Governance  Image

07 Jul 2016

A report published by Cranfield School of Management shows that the proportion of women on UK boards has increased since its last report in March 2015. The report ‘The Female FTSE Board Report 2016 – Women on Boards – Taking Stock of Where We Are’ (“the Cranfield report”) highlights however that “progress needs to accelerate” in order to achieve the target of 33 per-cent female representation by 2020 as set by Lord Davies in his final report into women on boards in October 2015.

The key findings in the Cranfield report are:

  • The percentage of female-held directorships in FTSE 100 Boards has increased to 26%, up from 23.5% in March 2015.  The figure of 26% is similar to the 26.1% figure reported by Lord Davies in his final report on women on boards in October 2015.
  • In order to achieve the 33% target set by Lord Davies, there would need to be an average annual increase of 1.6% women across FTSE 100 boards and would require “approximately 27% of women on FTSE 100 boards in 2016”. 
  • The percentage of female-held directorships on FTSE 250 boards has increased to 20.4%, up from 18% in March 2015 and 19.6% in the final Lord Davies report.
  • There are now no all-male boards in the FTSE 100 – this figure was 21 in 2011.  The number of all-male boards for FTSE 250 companies stands at 15; down from 23 in March 2015.  

The Cranfield report indicates “steady progress compared to March 2015 but to a relative stagnation of the pace of change since October 2015”.  It also indicates that based upon current trends of new appointments going to women and board turnover rates the target of 33% female representation on FTSE 350 boards by 2020 will only be met “if the pace of change increases to former levels”.  Currently “progress among executive ranks and in the executive pipeline remains very slow”.  The Cranfield report indicates that “this shortage of women in top senior roles will make it difficult to reach and sustain the new target of 33% women on boards by 2020”. 

Due to what the report calls a “concerning trend of stalled progress”, the Cranfield report identifies a number of areas for consideration to increase momentum in the future: 

  • Refocus attention on boards.  Board turnover rate should return to 14% with a larger share of new appointments going to women. 
  • Greater attention should be paid to the female pipeline.  The report indicates that “future action should consider how organisations can develop talented women more effectively and how they can encourage more of them to take up operational roles”.
  • There should be greater robustness and transparency in reporting gender composition at Executive Committee level and below.
  • Companies should consider how metrics and targets might help them achieve progress towards gender balance in senior management ranks and below.

It is hoped that the recently announced government-backed Hampden/Alexander review will provide a springboard for renewed progress in this area to achieve the 33% target.  The review will “focus on ensuring the very best of female talent make their way up the pipeline by removing barriers to their success, and continue to drive forward the momentum from Lord Davies’ work”.  The findings of the review are expected to be presented to the government by the end of 2016. 

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