Women in the boardroom - report

22 of the top FTSE 100 companies still have no women on the Board according to new figures released by Cranfield School of Management.

22 of the top FTSE 100 companies still have no women on the Board according to new figures released by Cranfield School of Management.

The Female FTSE Report (2005) monitors the composition of FTSE Board rooms and acts as a barometer of diversity in UK business.

It points out that in the US, 100% of Fortune 100 companies have at least one woman on their Boards.

Whilst 2005 sees an overall increase in the number of companies (to 78) having women directors, only 11 of these companies have female Board members holding Executive positions.

Of the 30 female appointments over the last year, nine women have taken up a second or third FTSE Board seat.

Of the 121 female directors, only four women came from ethnic minority backgrounds.

The overall proportion of ethnic minority directors in the FTSE 100 is 2.4%.

Progress on ethnicity is not in keeping with the recommendations of the Higgs Review which called for the board room to open up to greater ethnic diversity.

The study also examined all 72 new female appointments between 2001-2004, and a randomly selected group of new male appointments.

Says Dr Val Singh, co-author of the report, "What is striking about the female directors in this cohort is that they were far more likely to be international, already had board experience and came from more varied backgrounds than the new male appointees." Thus, in terms of nationality 32% of female directors were from the US and Canada, compared to 7% male directors.

28% of the women came from management consultancy compared to 14% of the males, whilst 32% had public sector board experience compared to 18% of the male directors.

The top five companies showing diversity in the UK boardrooms are Scottish Power and British Airways (joint first) followed by AstraZeneca, Centrica and Pearson.

Notably, Pearson has a female CEO, CFO and NED at the helm.

The sectors with the most companies with women directors are banks, telecoms and tobacco followed by retail, utilities and pharmaceuticals.

Women make up 17% of the directorate in transport, 14% in banking, and 13% in financial services.

Professor Susan Vinnicombe, co-author of the report, was particularly interested in the management of the talent pipeline, that is, the layer from which tomorrow's women businesses leaders will be drawn.

"That incremental change in the talent pipeline is being achieved can be seen from the rising number of women in the boardroom, arguably though a step change is needed if the supply of executive directors and NEDS is to improve dramatically in the future." The companies who manage the talent pipeline well are characterised by: " continuous communication from top leaders about the strategic need to build the talent pool; " robust management disciplines including goal setting and accountability for improvement of diversity; " diversity is fully integrated into the talent agenda; " an inclusive culture so that the talents and differences women bring to business are recognised and valued.

Interestingly some of the companies with the highest percentages of women in the senior tiers of management are not necessarily the companies with the largest female work forces.

Says Professor Susan Vinnicombe "We are pleased to see women selected to the FTSE 100 boards from a wider pool of talent than at any time in history.

Women are being chosen to serve on top boards not simply because they are women but because they are highly qualified.

They bring fresh perspectives derived from their diversity in nationality, ethnicity, board experience, professional skills and sectoral work experience.

This study is groundbreaking because it is the first real evidence that chairmen/CEOs are rewriting their definitions of 'relevant experience' for a FTSE 100 directorship." Says Rt Hon Tessa Jowell MP, Secretary of State for Culture, Media and Sport and Cabinet Minister for Women, "A 13% increase in the number of companies with female members is good news but as Professor Vinnicombe says a step change is indeed needed.

The findings of the Women and Work Commission which is due to report early next year will be vital in offering that boost".

The findings of Cranfield School of Management's research were announced at a business breakfast for CEOs/Chairmen held at the offices of PricewaterhouseCoopers, on November 23, 2005.

Moira Elms, PWC UK Board member, said "We have been involved with the Female FTSE report for the past few years and watch with interest the changing demography of the boardroom.

The fact that change is so slow has confirmed to us the importance of proactively managing our own internal female talent pipeline.

Our experience demonstrates that managing this proactively does make a difference".

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