Today, Cranfield University’s School of Management published its 2016 FTSE Female Board Report. This report is the first published since the conclusion of Lord Davies’s Women on Boards review, and the new target of 33% female board participation in FTSE 350 companies by 2020 was established.
The report refers to a ‘relative stagnation of the pace of change since October 2015’ and this is reflected in the highlight statistics:
- The report notes a slight decrease in the number of women on FTSE 100 boards, from 26.1% in October 2015 compared to 26% in June 2016. This is the first time that the figure has stagnated in this way since 2011. As regards FTSE 250 boards, female board representation has increased from 18% to 20.4%.
- The percentage of female non-executives in FTSE 100 companies has stayed the same as was the case in October 2015, namely 31.4%. Amongst FTSE 250 companies, there has been a slight increase from 23% to 25.7%.
- The percentage of female executives in FTSE 100 companies has increased marginally from 9.6% in October 2015 to 9.7% in June 2016. Amongst FTSE 250 companies, there has been a slight increase from 4.6% to 5.6%. The report noted that progress in recruiting female executives (the principal failure of the Davies Review) remained ‘very slow.’
- As regards FTSE 100 companies, 61% have reached Lord Davies’s original target of 25% female board representation. Currently, only 19% have reached the new 33% target.
- As regards FTSE 250 companies, 36% have reached Lord Davies’s original target of 25% female board representation. Currently, only 15.6% have reached the new 33% target.
In order to remain on track to hit the new 33% target by 2020, FTSE 350 companies should aim for 27% female board representation by the end of 2016. At the current pace of change, this target will not be met.
There was, however, some good news. A number of FTSE 100 companies are close to achieving gender-balanced boards, and five FTSE 250 companies actually have gender-balanced boards. Amongst the FTSE 250, the number of all-male boards fell from 23 to 15 (no FTSE 100 company has an all-male board).
Overall, however, the report does not make for encouraging reading. It is clear that progress in many areas has stagnated following the end of Lord Davies’s original five-year review. If the 33% target is to be met, the new review led by Sir Philip Hampton will need to look at how best to increase the pace of change, especially in relation to the recruitment of female executive directors. With the prospect of Brexit on the horizon, and the reduced likelihood of quotas being imposed, it is important that FTSE 350 companies do not become complacent and place the issue of board diversity on the backburner.
Featured image is taken from the cover of the FTSE Female Board Report 2016.