Britain's Most Admired Companies 2016: Boardroom diversity barometer

The fact that company boards are not diverse enough is in the spotlight - but what do today's bosses really think about the issue?

by Andrew Saunders
Last Updated: 07 Dec 2016

How times change. For much of Most Admired's 26-year history, the now smoking-hot topic of board composition - what kind of person gets on the board, and why - was hidden away almost entirely below the radar, considered too arcane for any but the most pointy-headed of corporate governance wonks.

But driven by the diversity agenda and the desire to do something about the 'male, stale and pale' boardroom stereotype, in recent years the issue has started to receive something like the level of scrutiny it deserves. The realisation has come, belatedly no doubt, that decision-making groups take better decisions, more often, if the people on them aren't all the same.

Consequently there is now an official (albeit voluntary) government target for gender diversity - all FTSE 350 companies should have 33% of female directors by 2020. (You will be unsurprised to hear that so far only around 17% of them have achieved this figure, although in the FTSE 100 that rises to just under 26%.)


Why diversity matters

Getting a mix of people at all levels of your organisation isn't just a question of fairness. There's a business case as well as a moral one. At MT's Inspiring Women in Business conference in November, we asked Debbie Crosbie, COO of Clydesdale Bank, and Accenture's MD for customer strategy Rachel Barton why diversity matters.


But how far has this drive to get a more varied bunch - not just in terms of gender, but also age, culture, ethnicity and so on - penetrated into the ranks of the Britain's Most Admired boardrooms? How important is diversity when it comes to the attributes that UK plc's bosses look for when considering candidates for a place at the corporate top table?

For the first time, this year's Most Admired survey included some specially drafted questions to throw light on the issue. We asked respondents to rate the importance of a number of qualities (ranging from age and gender to religion and nationality) when it comes to board composition. This threw up some intriguing responses.

The number one priority was, unsurprisingly, expertise - followed by relevant experience and then creative thinking. But hot on the heels of these so called 'hard' skills comes gender, the fourth most important item on the list and ahead of education/qualifications in terms of the requirements for board composition. Culture/ethnicity and age followed in sixth and seventh places respectively. Religion was considered the least important of the 10.

Now while we don't have any historic data to make comparisons with, it seems a fairly safe bet that gender would not have scored so highly - or even at all - on such a list had the same question been asked 20 or even 10 years ago. Progress may be slower than many would like, but it's not so long since there was only one female CEO in the FTSE 100. With the appointment of Emma Walmsley at GSK, there will shortly be seven.

So views on diversity may be changing, but how well is that reflected in actual board composition? Here the answers suggest that management hubris remains alive and well. Asked to score the diversity of boards across their sector compared to their own board respondents consistently rated their own top teams as more diverse than those of their industry in general.

So for the time being, most directors (who are themselves mostly male) still harbour the delusion that they are above average performers when it comes to boardroom diversity ...

IMPORTANCE OF QUALITIES WHEN IT COMES TO BOARD COMPOSITION

How would you rate the importance of each of these issues with regards to composing a board of directors? Score between: 0 (of no importance whatsoever) to 10 (vital)

Find this article useful?

Get more great articles like this in your inbox every lunchtime

                     Sponsors CEB logo ICRS crf

SD