Gender diversity on the FTSE 100 has taken a big jump towards reaching government targets, and has almost doubled in four years.
The annual report by Lord Davies of Abersoch shows that companies are making efforts to meet the government’s target of 25 per cent, with the total now at 23.5 per cent. That's an increase of 2.8 percentage points from last March and a larger jump for 12.5 per cent, when the initiative was launched in 2011.
In 2011 Lord Davies set an objective of 25 per cent of FTSE 100 board positions being occupied by women, with the target date set at 2015.
Business secretary Dr. Vince Cable said real progress had been made:
FTSE 100 boards have made enormous progress in the last four years, almost doubling from 12.5 per cent to 23.5 per cent. We must celebrate this outstanding achievement and the change in culture that is taking hold at the heart of British business.
We are confident we will reach our target this year through our voluntary approach, but our work is not complete and British businesses must keep focused on the target. The eyes of the world are on us to achieve gender parity.
Evidence shows that boards with increased female representation outperform their male-dominated rivals so my long term aspiration is for gender parity on FTSE boards. Over the term of the next parliament I hope to see the number of women on FTSE 100 boards increase to a third.
The government’s tone may be congratulatory, but there is still much work to be done. At the very top of FTSE 100 companies, diversity is thin on the ground. Although 28.5 per cent of non-executive directors are women, men still account for 93.4 per cent of executive directors.
What is more, when the measure is expanded to the FTSE 250, only 18 per cent (up from 15.6 per cent last March) of board members are women, 23 per cent of non-executives and 4.6 per cent of executives are female.
Nonetheless, progress is being made, and minister for women and equalities, Nicky Morgan, praised the efforts:
We have almost doubled women’s representation on FTSE100 boards in four years; we only need 17 more women to be appointed to these boards and we will have met the 25 per cent target we set ourselves. When we started this work in 2011 there were 21 FTSE 100 boards that had no women on them. Now there are no all-male boards left. This is great news.
But to keep on track we also need to ensure that women are well represented at senior executive level too, making them ready to take up board level positions. In the FTSE 100, the total number of female senior executives has increased from 19.9 to 21 per cent which is to be welcomed, but we need to keep up the pressure to see this increase still further.
This is not only good for women, but good for business too. Boards which reflect their customers and clients are better able to understand their needs and respond to them.