Quarter of British blue-chips have no women on the board

Nov 25 2005 by Nic Paton Print This Article

Twenty five of the FTSE 100 companies in Britain still have no women on the board, according to a study by Cranfield School of Management.

The annual Female FTSE Report looks at the composition of FTSE boardrooms and is intended to act as a barometer of diversity in UK businesses.

This year's survey has found that while every company in the U.S. Fortune 100 has at least one woman on their boards, in the UK the situation is very different.

Although there was an overall increase in the number of companies (to 78) having women directors during 2005, just 11 of these had female board members holding executive positions.

Of the 30 female appointments made over the last year, nine women had taken up a second or third FTSE board seat, said Cranfield.

Of the 121 female directors, just four women came from ethnic minority backgrounds, it added.

The overall proportion of ethnic minority directors in the FTSE 100 was 2.4 per cent, the research calculated.

Progress on ethnicity was not in keeping with the recommendations of the Higgs governance reforms, which called for boardrooms to be opened up to greater ethnic diversity, it added.

The study also examined all 72 new female appointments between 2001-2004 and a randomly selected group of new male appointments.

Dr Val Singh, co-author of the report, said: "What is striking about the female directors in this cohort is that they were far more likely to be international, already had board experience and came from more varied backgrounds than the new male appointees."

In terms of nationality, 32 per cent of female directors were from the U.S and Canada, compared with 7 per cent of male directors.

A total of 28 per cent of the women came from management consultancies compared with 14 per cent of the males, while 32 per cent had public sector board experience compared with 18 per cent of the male directors.

The top five companies showing diversity in the UK boardrooms were Scottish Power and British Airways (joint first) followed by AstraZeneca, Centrica and Pearson.

Pearson, notably, has a female chief executive, chief finance officer and non-executive director at the helm.

The sectors with the most companies with women directors were banks, telecoms and tobacco followed by retail, utilities and pharmaceuticals.

Women made up 17 per cent of the directorate in transport, 14 per cent in banking, and 13 per cent in financial services.

Professor Susan Vinnicombe, co-author of the report, said: "That incremental change in the talent pipeline is being achieved can be seen from the rising number of women in the boardroom, arguably though a step change is needed if the supply of executive directors and NEDs is to improve dramatically in the future."

The companies who managed the talent pipeline well were characterised by: continuous communication from top leaders about the strategic need to build the talent pool.

They also showed robust management disciplines including goal setting and accountability for improvement of diversity and diversity was fully integrated into the talent agenda.

There was an inclusive culture so that the talents and differences women bring to business were recognised and valued, she added.

Interestingly, some of the companies with the highest percentages of women in the senior tiers of management were not necessarily the companies with the largest female work forces.

"We are pleased to see women selected to the FTSE 100 boards from a wider pool of talent than at any time in history," said Vinnicombe.

"Women are being chosen to serve on top boards not simply because they are women but because they are highly qualified.

"They bring fresh perspectives derived from their diversity in nationality, ethnicity, board experience, professional skills and sectoral work experience," she added.