A new Davies report on women on boards says that a third of board members in FTSE 350 companies should be women. What progress has been made so far and how will that target be met?
Women on boards – what’s happening next?
It’s almost five years since the original Davies report on women in the boardroom was published. Back in the autumn of 2010, when Lord Davies was doing research for his report, on average 12.5% of board members in FTSE100 companies were women. Now that figure is 26.1% (compared to the target set in the report of 25%). Among FTSE 250 companies (the next 250 biggest companies after the FTSE 100), the figure is 19.1%, compared to 7.8% in 2011. There have been 550 new female appointments to the boards of FTSE 350 companies in the last five years.
SAVVY TIP: The number of all male boards has also fallen sharply. There were 152 all male boards in 2011. Today there are no all male boards in the FTSE 100 but there are 15 in the FTSE 250.
The longer term aim
Although there have been far more women appointed to board roles in the last five years, there’s been a disproportionate number of them appointed to non-executive roles. That means they don’t have the major board roles, such as chairman/woman, chief executive and chief financial officer.
The next five steps
The Davies report published this week recommends five ‘next steps’:
A continued voluntary approach
The report says that the current business-led approach should continue for another five years, with the aim of ensuring that there is a substantive and sustainable improvement in women’s representation on boards of FTSE 350 companies in the future.
Increasing the target
The report says that the voluntary target should be increased so that women make up a minimum of a third of board members across FTSE 350 companies in the next five years. The report also says that all those involved should work together to make sure that more women are appointed to the roles of chairman/woman, senior independent director and executive director roles.
Focusing on the executive layer
The report says that FTSE 350 companies extend the best practice and look to improve the representation of women on the executive committee and in the most senior leadership positions.
Independent steering body
The report recommends setting up an independent steering body should support business in their efforts to improve representation of women on the boards, act as a catalyst for sustained progress as well as monitor and report on progress.
The steering body should review the recommendations made and publish further recommendations at the beginning of 2016.
What do other countries do?
Several other European countries have a quota system, setting the minimum percentage of women who should be on company boards:
- Norway – 40%
- France – 40%
- Italy – 33%
- Belgium – 33%
- Germany – 33%
Non European countries:
- Malaysia – 30% of new appointments
- Brazil – 40% for state-controlled companies.
SAVVY TIP: Norway has the highest percentage of women on boards at 35%, with the UK also behind Sweden, France, Finland and Belgium. China and India have the lowest percentages – 11% and 12% respectively – with the republic of Ireland third from the bottom with 12.7%.
Which companies have the most women on the boards?
Currently, one FTSE company has a 50:50 split of women and men on the board, and several have 30% or more.
- Unilever: 50% of board members are women in 2015, compared to 25% in 2011.
- Marks & Spencer: 41.7% of board members are women in 2015, compared to 27.3% in 2011.
- Diageo: 40% of board members are women in 2015, compared to 36.4% in 2011.
- Astrazeneca: 33.3% of board members are women in 2015, compared to 27.3% in 2011.
- Sainsbury’s: 33.3% of board members are women in 2015, compared to 27.3% in 2011.
Which companies currently have all male boards?
There are currently 15 companies in the FTSE 350 with all male boards. They include:
- P2P Global Investments
- Telecom Plus
- Wizz Air
You can read Lord Davies’ five year summary on women on boards
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