The government is backing a campaign renewing efforts to increase female representation in business leadership positions, which includes a call for FTSE 350 companies to have 33% women on boards by 2020, after new research showed progress in developing a talent pipeline has slowed
The latest initiative will build on an earlier review by Lord Davies which saw the numbers of females on FTSE 100 boards up from 12.5% to 26%.
It comes as the new 2016 Female FTSE Board Report is released by Cranfield University, City University London and Queen Mary University London. This shows that the overall percentage of women on FTSE boards has increased compared to March 2015, but that the pace of change is slowing.
The report points out that in order to meet the 33% target for FTSE 350 boards by 2020, a constant turnover is required and an appointment rate of one in three board positions going to women. Recently turnover rates have decreased, with fewer people leaving and joining companies, and the percentage of new appointments going to women over the past six months has dropped below the level required.
In particular, progress in the executive ranks and in the executive pipeline remains very slow. The report found that only 19.4% of FTSE 100 executive committee members are women and just 9.7% hold the most important senior executive and operational roles on these committees. That proportion falls to 5.6% in the FTSE 250.
Sir Philip Hampton, chair of GlaxoSmithKline, and Dame Helen Alexander, chair of UBM, will lead the new review, which will focus on the pipeline will be on representation on executive committees and direct reports to the executive committee in FTSE 350 companies.
Baroness Neville-Rolfe, corporate governance minister, said: ‘We have seen an increase of 137% in the number of women on boards. Yet 15 boards in the FTSE 350 are still all male and women only count for 7% of executive directors.
‘Philip Hampton and Helen Alexander will examine how to improve the representation of women in the executive layer and champion continued increases in the representation of women on boards across the FTSE 350.
‘This will help to ensure a sustainable talent pool of women for board positions for both executive and non-executive positions in the future.’
A key element of the Hampton-Alexander review will also consider current research on how to drive improvements and the obstacles preventing women’s progression. It is expected that findings will be presented to government by the end of 2016.
Susan Vinnicombe, professor of women and leadership at Cranfield University and co-author of the Female FTSE Board Report 2016, said: ‘The focus on boards must be preserved as the pace of change has not kept up after the Davies closing report. In order to hit the 33% board target by 2020, chairmen and search consultants must ensure the board appointment process remains robust, transparent and gender-inclusive.’
Melanie Richards, vice chair at KPMG, which is the business supporter of the report, said: ‘Businesses are facing significant challenges following the EU referendum, but we cannot allow gender diversity to slip down the agenda.
‘The conversations I have had with chief executives reveal the intention to tackle diversity is there, but this intent must continue to be matched by action if we are to make greater progress on this issue.’
