The newly published Female FTSE Board Report 2020 paints a positive picture of female inclusion at senior levels in the UK’s largest 350 publicly listed companies.It suggests the targets set in the Davies and Hampton-Alexander Reviews for greater female representation in key decision-making roles are set to be met, but that progress still needs to be made and efforts redoubled. This is especially since the impact of Covid-19, which is likely to be hardest on women, and the opportunities afforded by the current focus on flexible working for all.

On track to meet the target

Cranfield School of Management’s research, led by Sue Vinnicombe, Professor of Women and Leadership at Cranfield University, found that against targets of 33% of women on boards for FTSE 350 companies by December 2020:

• the percentage of women on FTSE 100 boards has increased from 32% to 34.5%, with 324 women holding 355 directorships. In 2011, this figure was just 11% and 122 directorships. The percentage of female non-executive directors (NEDs) is at an all-time high of 40.8%, with the percentage of female executives rising slightly to 13.2%.
• female directors of FTSE 250 companies has risen from 27.3% to 31.9%. The percentage of female NEDs is 37.6%, but the percentage of female executive directors (EDs) is low at 11.3%.

Yet the research also found there continues to be few women appointed to the most senior roles. In the FTSE 100, there are only five women CEOs, eight women Chairs and 21 women Senior Independent Directors. Moreover, while the number of FTSE 100 committees has risen from 295 in 2019 to 393, the percentage of women chairing these has dropped from 31% to 29%.

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Related:

• Think Global People: the Road to Future Fit
• Make a difference to your career and your future
• Think Women - the time for action is now

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‘More women needed in influential roles’

Commenting, Professor Sue Vinnicombe, said: “It is not sufficient just to have a critical mass of women Non-Executive Directors on a board in order to increase the number of women in the executive pipeline.“There need to be women in influential roles such as Executive Directors. The added dimension of Covid-19 means organisations must be pro-active to address the long-term impact of the pandemic on women’s careers. With more focus on flexible working and wellbeing, it is an opportunity to progress the diversity agenda.” 

Why is diversity and inclusion important to business?

Boards with greater diversity – encompassing gender, race, age, and disability status, among other factors – have a wider world view. This means they are better placed to make decisions more in tune with social changes and trends in the marketplace.Proprietary research by the World Economic Forum echoes other studies in showing that “top-quintile boards tend to have more female directors than their bottom-quartile counterparts”. 

Do targets for diversity and inclusion work?

The research team behind Cranfield School of Management’s Female FTSE Board Report also investigated how targets are being used in practice. It found:

• most organisations adopted voluntary targets because previous diversity initiatives had failed.
• little resistance to targets and gender targets as they have become relatively normalised in the UK.
• despite the emphasis on realistic targets, more ambitious targets were sometimes seen as a way of mobilising organisations into action, even when they are not fully met. The trend was a target of 30%-40% women in senior leadership roles.
• Targets are a tool for culture change. When implemented thoroughly and ambitiously, targets created scrutiny and unrooted bias across key talent management processes.

Elena Doldor, Reader in Organizational Behaviour at Queen Mary University of London, and report co-author, said: “Targets don’t threaten meritocracy, they enable it. Our research indicates that when used ambitiously and systemically, targets can unroot bias across key talent management processes and contribute to genuine culture change. For targets to become more robust, it is critical that organisations put in place accountability mechanisms for their meeting their targets and address the long-term impact of the pandemic on women’s careers.”As Fiona Murchie similarly outlines in the latest issue of Think Global People by highlighting a McKinsey Global Institute report, the report also spoke of the need for organisations to address more proactively the long-term effects of the current pandemic on the pipeline of female talent. One approach is to take tangible actions to buffer the disproportionate impact the lockdown has had on women’s careers. Global communities like Think Women are important forums for discussing how to achieve this and sharing experiences.Alison Kay, EY UK&I Managing Partner for Client Service, said: “There is no doubt that targets have helped to improve diversity on UK boards by setting a clear vision and keeping organisations on track.“However, as outlined in the report, targets must be coupled with action on cultural change to accelerate progress for future generations and spark a positive ripple effect that extends into the wider economy and society.”Read about how you can get involved with our Think Women Community ‘Make a difference to your career and the future’Attend the next online Think Women Event on 11 November. Register your interest today.To find out how to join, support or sponsor contact Fiona Murchie communities@thinkglobalpeople.com or call +44 (0)1892 891334

 

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