Another is the City. A report commissioned by the Government Equalities Office to coincide with International Women’s Day predicts that at the current rate of progress it could take six decades for women to gain equal representation on the boards of FTSE100 companies. This tallies with research published last November by the International Centre for Women Leaders at Cranfield University School of Management, stating that there are currently just 12.2 per cent female directors on FTSE100 boards. It also said there had been a decline in the overall number of companies with women on boards, and that a quarter of FTSE companies had exclusively male boards.
However, at the next level down there are some encouraging signs. In the space of a year, the number of women sitting on the corporate boards and executive committees of FTSE-listed companies has risen from 1,877 in November 2008 to 2,281. India Gary-Martin, the senior RBS banker whose appointment as president of the City Women’s Network (CWN) was also announced on Monday, says this explodes the myth that there are not enough female executives with the skills and experience to make it onto company boards.
“There are two myths surrounding the lack of women at board level,” she says. “One is that there is a supply issue, whereas in fact there are a lot of talented senior women in the pipeline. The other is that they can’t make it through because of their family commitments and work/life balance needs.” In fact, Gary-Martin says, most senior women have moved past the age when small children require a heavy time commitment, have well-organised childcare in place or else have decided not to have children. In other words, their full commitment to their work should not be in doubt.
So why is the healthy pipeline not delivering more board appointments? Professor Susan Vinnicombe, director of Cranfield’s Internatinal Centre for Women Leaders, says the style in which such appointments are made – behind closed doors and without positions being advertised – maintains that old wellspring of corporate chauvinism, the old-boy network.
“Even with executive search teams and corporate governance rules, things are still done through personal referrals, based on who the directors know, and women get systematically overlooked,” she says. “Directors like to appoint people they consider are ‘known quantities’ that they can trust, but that can lead to great complacency, because it means you won’t be challenged as much.”
Campaigners say that having more female board members can lead to more balanced decision making, better connection with markets in which many of the customers are female, and improved innovation and strategy – by failing to bring more women onto board, companies are missing out on a massive amount of senior talent. India Gary-Martin says the more women who can be brought onto the board, the more change can be affected.
“In any management team, if there’s one woman she tends to have to conform. With two women you can start to see the difference their influence makes, and with three women you tend to see change in how the board operates and thinks.”
In some countries, such as Norway and Spain, governments have taken action to speed up the process of getting women onto boards by demanding quotas. In the UK the government is stopping short of legislating to demand quotas, but it is increasing pressure on companies to take action. The Financial Reporting Council has this week been asked by the government to consider adding a new clause to its code of conduct requiring firms to explain the number of women on their boards and to explain what they are doing to achieve greater diversity in the boardroom. India Gary-Martin of CWN, however, says that companies can address the problem without added involvement from the government.
“We want to see companies commit to change without the need for legislation or quotas, and I do think that’s possible,” she says. “It’s going to take a few courageous people, but things have improved significantly already, and that needs to continue.”
Professor Finnicombe says it needs to speed up. One interesting figure in Cranleigh’s Female FTSE Index for 2009 showed that of 14 women who took up positions in FTSE100 boardrooms last year, only one was from the UK. With other countries having overtaken Britain in accelerating the process of bringing in more women to the boardroom, she says the risk is that British female executives will head outside the UK to take up appointments instead.
“There does seem to be something of a shift in the air,” she says, “but I’m not getting too excited just yet because we’re still far behind other countries. A number of FTSE chairmen are on board with the issue, but many more are not.”