Diversity: Getting better at Board-level, but what about below?
Norman Broadbent’s Board Practice has been an enthusiastic supporter of diverse Boards throughout its 40-year history. Diversity of thought encourages the development of Boards which are high performing, collegiate and low-ego, able to embrace potential opportunities and devise unconventional approaches to problem solving. So, it was with interest that we received Boardex’s latest report on Gender Diversity and Leadership, a wide-reaching analysis of global appointments at Board level and Leadership (Board -1) in listed businesses across the globe.
Listed businesses have been at the forefront of the battle for equality, with pressure being placed on Boards to embrace diversity – for example most recently by the Parker Report, which challenged Boards to achieve ‘One by 2021’ – ie one member of the Board to be from an ethnic minority background on the Board by that date. This follows on from the success of a similar approach from the Davies report in 2010, which challenged the FTSE350 to increase the representation of women on Boards to 25% by 2015. This challenge was met by the FTSE100, although the FTSE350 fell slightly short at 22%. It should be noted that it had faced a considerably tougher challenge, starting with a much lower rate of representation, and is on track to catch up with the top listing. The updated challenge of the Hampton Alexander review – to increase representation of women on FTSE 100 boards to 33% by 2020 was easily met.
So far, the figures above point to definite movement in the right direction. However Boardex’s latest report highlights a worrying trend globally – that while the proportion of women on Boards is increasing, with 27% of all new Board appointments going to female candidates, the same cannot be said of Executive Leaders, where the figure is just 19% globally. This suggests that:
- There may continue to be a scarcity of Female leaders who are in positions to take up Board positions for several years to come;
- The increase in appointments of women onto Boards is not an ‘organic’ process, and pressure will need to be maintained until a stable pipeline of talented female leaders is built.
The study goes on to bisect the figures by nation (with the UK figures falling firmly matching the global averages) and segments the leadership roles into functions and examining the gender balance across and between those functional areas. The functions were: General Management (44% of all roles); Finance (12%), HR (6%), Operations and Technical (10%), Legal (8%), Property & Purchasing (7%), Sales, Marketing & PR (8%) and Strategy and CSR (6%). This highlights something that we often come up against, when conducting searches for diverse Non-Execs – the association of female candidates with certain roles. The only function with more female than male appointees is HR (60%/40%) – one of the smallest function segments. The next closest to an even split is Legal, with a 37% female appointee rate.
The largest function – “general management”, which represents nearly half of all roles, is divided 89% male, and just 11% female. This suggests women are still incredibly unlikely to step into the ‘big’ roles of Chief Executive Officer, Chief Operating Officer etc, which are the roles most sought after in Non-Execs. They are also the roles needed to give young women the role models to aim higher and aspire further. It is worth noting also that although women are increasingly likely to be found on Boards in the FTSE350, there are just 33 female Chairs across the whole index.
The Boardex report underlines the message we have been telling our clients – there is still plenty of work to be done in the diversity space. We were an early and ongoing supporter of the 30% club, whose work continues to push for improved gender equality; were one of only a handful of Search firms recognised by the Hampton Alexander review, and in 2019 became the first – and only – UK Partner of UN Women UK, the UK arm of the UN agency for gender equality, to support the vision of a more equal, inclusive world – both in the workplace, and in communities across the globe. The partnership leverages our Inclusion and Diversity solutions which are designed to help businesses create inclusive working environments and identify, attract and retain the best and most diverse leadership to support equality and commercial goals, and build a strong foundation for the future.
For more information on diversity on boards and how proactive talent pipelining can help you, please don’t hesitate to contact Jacqui Pinnell, Group Head of Research & Insight via Jacqui.firstname.lastname@example.org