At least a third of boardroom positions at Britain’s biggest companies should be held by women by the end of the decade, according to a report, although it does not recommend that quotas are imposed.
The government-backed report from Lord Mervyn Davies, who has been championing gender equality in the boardroom, shows that FTSE 100 companies have exceeded the target of having 25% women on their boards – more than doubling the number in 2011 when the target was set. Then, just 135 of 1,076 (12.5%) FTSE 100 directorships were held by women.
There are more women on FTSE 350 boards than ever before – 26.1% at FTSE 100 companies and 19.6% at FTSE 250 firms. Davies said there had been 550 new women appointments in just over four years. There has also been a dramatic reduction in the number of all-male boards. There were 152 in 2011, but there are currently no all-male boards in the FTSE 100 and only 15 in the FTSE 250, compared with 131 four years ago.
Davies hailed the “near revolution which has taken place in the boardroom and profound culture change at the heart of British business”. The former trade minister and chairman of Standard Chartered bank has set a new target of 33% female board members by 2020 and widened the scope to all FTSE 350 firms. But he says the introduction of legally enforced quotas is unwarranted as the progress so far proves that the voluntary approach is working.
“There is no evidence to warrant an about turn, but plenty of evidence to show the voluntary regime is working, as each and every month the percentage of women on FTSE boards increases,” the report says.
The UK ranks sixth in Europe behind Norway, Sweden, France, Finland and Belgium, many of which – including Norway, where women make up 35% of boards – have set formal quotas for female representation.
Nora Senior, president of the British Chambers of Commerce, said there was no need for “overbearing government regulation”. She added: “Gender discrimination has no place in the workplace in 21st-century Britain … We should not lose sight of the fact that business still needs to step up to the task of nurturing the pipeline of women at middle management level onto executive teams. More work remains to be done on internal appointments as well as external to ensure that female talent can rise to the very top.”
While British companies have been appointing more female directors, they have been slower to promote women into the top jobs – the chief executive, chief finance officer and chairmanship roles. Most female directors hold non-executive roles. Research by the Guardian conducted this year showed there were more men called John running FTSE 100 companies than all the female bosses combined.
The Davies review says “further work and a renewed focus is required” to increase women’s representation further and have more appointed to chair and senior independent director roles. It called for or an independent steering body to be set up to support companies and report next year.
At FTSE 100 companies, consumer goods group Unilever is leading the way after doubling the number of women on its board to 50% since 2011 – the only company to achieve gender parity.
At Marks & Spencer, female board representation has risen to 41.7%, from 27.3% four years ago. Drinks giant Diageo has gone to 40% from 36.4%. At drugmaker AstraZeneca, as well as Sainsbury’s, the proportion of women has risen to 33.3% from 27.3%. British American Tobacco has moved up to 30.8% from 25%; insurer Standard Life has seen a rise to 30% from 27.3%.
The companies in the FTSE 350 with all-male boards were named as Allied Minds, Centamin, Deajan Holdings, HellermannTyton Group, Nostrum Oil and Gas, Perpetual Income and Growth Investment Trust, Telecom Plus, Wizz Air Holdings, Al Noor Hospitals Group, Clarkson, Genus, Lookers, P2P Global Investments, Scottish Investment Trust, and Tritax Big Box Reit.
“It is unacceptable in this day and age to have any all male boards,” Nicky Morgan, secretary of state for education and minister for women and equalities, said at the launch of the review.
The FTSE 100 board with the most dramatic change was Old Mutual which went from no female representation to 38.5%. Rolls-Royce went from 7.1% to 33.1% while HSBC rose from 16.7% to 42.1%.
Davies called on investors to play a more active role in improving gender balance in the companies. He said customers and potential employees should act against companies which do not “get” gender diversity. “I think the customer should not be buying the product from those sorts of companies and young people should not be going to work for them,” he said.
Reacting to the review, the CBI called on the government to assist companies in increasing the representation of women with more free childcare and promoting flexible working.
The Institute of Directors said headhunters and recruiters had a big responsibility to ensure they were looking at candidates from “as wide a pool as possible”. Its chair, Lady Barbara Judge, added: “Women that make it to the top must also help others follow in their footsteps, by acting as role models and mentors.”
New research from Audeliss suggests Britain’s boardrooms risk going into reverse gear over the next 18 months, as the terms of current female non-executive directors expire. The executive search firm warns that because there are too few female executives in the pipeline to replace them, it is likely that the percentage of female non-executive directors on boards will fall from 31% to 26%.