Michelle Chance, Partner and Head of the London Employment team, Womble Bond Dickinson UK, says that real change is needed to achieve true quality despite rise in women in board-level positions
This year’s Hampton-Alexander Review report shows that further progress has been made towards achieving the targets set out in the original 2016 report, which were:
- 33% women on FTSE 350 boards by the end of 2020;
- 33% women on FTSE 350 executive committees and direct reports to executive committees by the end of 2020; and
- FTSE 350 companies to increase the number of women filling the roles of chair, senior independent director and executive director positions on their boards.
The FTSE 100 is on track to hit the target, with more than 30% of board positions already filled by women, and women on FTSE 100 executive committees has passed 21% for the first time. This year, around one-third of all board appointments went to women and two-thirds went to men.
In the FTSE 250, the percentage of female directors has increased to 24.9%. In the FTSE 350, the picture is less rosy with nearly a quarter of companies having only one woman on their board and five boards are still all-male. Disappointingly, the number of women in CEO roles has fallen from 15 to 12 this year. In order to hit the targets, half of all board appointments over the next two years will need to be women.
There has also been an increase in the number of women in senior leadership roles, with FTSE 100 executive committees at over 21% women for the first time. This is where the hard work needs to be done to promote equality, as this is the pipeline for future board positions. Businesses need to encourage male champions and mentors of female executives at Board level, giving women crucial Board level experience, building up their confidence and developing the female pipeline of executive Board level talent for the future. There are good financial reasons for increasing board diversity, as well as moral ones.
According to the Minister for Women and Equalities, when women are included, businesses are more likely to enjoy profits above their industry averages. In addition, companies are better able to represent their employees, consumers and stakeholders with a more diverse board, hence generating more business and marketing opportunities and helping to retain and attract a high-quality diverse workforce, which is representative of a business’s client/customer base and the multi-cultural society in which we live.
While the increase in non-executive roles held by women is encouraging, it is important not to lose sight of the fact that executive positions, (which is where the real power and ability to influence key decision-making and strategy is held) are still overwhelmingly held by men. For women to be encouraged to apply for board level executive appointments, they need to see more male executive Board directors speak openly about balancing their work and family life and how it can work in practice.
Real change is needed here in order to achieve true equality, ensure a level playing field and provide male or female role models for the leaders of the future who demonstrate by “walking the walk” as well as “talking the talk” how they can combine being devoted hands-on parents or carers of elderly relatives/disabled children with successful high flying careers.
Partner and Head
London Employment team