In four years, the percentage of women on FTSE 100 boards has more than doubled from 12.5% to 26.1%. But anyone hoping that Lord Davies, who set the original 25%-by-2015 target, would turn his attention to the more stubborn issue of the lack of female executives will be disappointed today.
Davies’ latest voluntary target is FTSE 350 boards should be 33% female by 2020. This is good in some respects, particularly as the FTSE 250 has been lagging its blue chip counterpart, with boards 19.6% female. And, while there were 152 all-male boards in 2011, there are still 15 in the FTSE 250. Gentlemen we’re looking at you.
But, as Lastminute.com founder Baroness Martha Lane-Fox pointed out, a target that boards should be a third women isn’t exactly striding ahead towards equality.
More frustratingly, Davies has shied away from introducing any concrete aims for increasing the number of women in executive positions. His report only says ‘all stakeholders’ should do something about it.
Yet almost all the increase in women on FTSE 100 boards has come from non-executive directors, 31.4% of whom are now female. The number of female execs has risen from 5.5% to a still paltry 9.6% in four years. The FTSE 250 is – surprise, surprise - worse: female execs are now 5.2%, up just 1% in four years.
In the FTSE 100, there are still only five female CEOs and the number of female chairs has risen by 50%. To three.
The reasons for this are, of course, varied and many - from senior women not getting that ‘tap on the shoulder’ to women further down the ranks not being able to get back on the career ladder after having children. And there’s not just one ‘glass ceiling’ – many women just don’t want to work for companies that place small but numerous obstacles in their path, however unintentionally.
The problem, then, goes far wider than just the small minority of already very successful women who miss out on board positions – although many deserve that call and the positive example of more powerful women goes far wider than the boardroom.
But Davies and his team have effectively dropped the baton and there’s no guarantee the government will pick it up. Yes, his remit is just women on boards. However, he could have said companies should set targets for increasing the number female senior managers (however defined), as Lloyds and Barclays have, to start fixing that all important ‘pipeline’. And that’s just one idea plucked from past reportage, as opposed to having had months to consider the issues in detail.
And what of ethnic diversity? Former business secretary Vince Cable and his ex-shadow Chuka Ummuna pointed out that it's gone into reverse on FTSE boards recently and have recommended a target of no all-white boards by 2020.
Diversity correlates with better business performance, but we may be looking at the issue wrong. Margaret Kett, a partner at headhunter Tyzack, argued in MT recently that companies that perform better are more likely to appoint diverse staff as they already think more innovatively.
Unless companies already have a diverse mindset, women and other minorities appointed to the board or other senior positions may well find themselves shut out. Shainaz Firfay, an assistant professor at Warwick Business School, noted today that ‘very often women who are appointed to boards to meet quota requirements have claimed that they are stigmatised and it is common for their ideas to be ignored or swept aside.’
In that case, many businesses won’t benefit from the diversity of thought that different appointees bring. The corporate world needs to start thinking differently and accept that it is their responsibility to become more diverse – only then will they become more successful and we will see real change at the top.