Gender diversity: women in business
The publication of Lord Davies of Abersoch’s report on board diversity in 2011 was a wake-up call for UK businesses. In it, he recommended that 25% of boards in FTSE 100 companies should be female by 2015.
On the whole, listed companies are making impressive progress in working towards this target. However, our survey of more than 1,700 companies – from FTSE 100 giants to the growing businesses on smaller-cap markets – shows that this progress is not as widespread as it could be.
Companies listed on the Alternative Investment Market (AIM), in particular, are lagging behind in terms of gender diversity. Over the past three years, only 6.6% of new recruits to Non-Executive Director (NED) positions were women, compared to around 25% of Non-Executive Directors overall.
These companies, often backed by investors or venture capital vehicles, clearly have to do more to demonstrate they are drawing Executive candidates from the widest possible pool. Investors are increasingly demanding greater transparency around recruitment practices, and more and more larger companies stipulate they will limit whom they work with if they fail to meet exacting diversity standards.
Women on boards: female directors
But while gender diversity attracts a lot of focus, the age profile of boards in UK Listed companies has barely changed. While a few exceptions drag the overall age average down in certain markets, most Chairmen and Non-Executive Directors tend to be in their 60s, suggesting that businesses could face issues with succession planning in the long term.
Further key findings from our research include:
- The number of female Executive Directors is low, but improving slowly. In the FTSE 100 this proportion is highest, at 7.6%.
- In the FTSE 100 and FTSE 250, Non-Executive Director boards have made huge progress in increasing gender diversity. Non-Executive Director posts filled by women were 37% and 34% respectively in the last three years.
- Executive Directors tend to be, on average, 10 years younger than Chairmen across all markets.
- Age diversity is greatest on AIM, where Directors’ ages range between mid-20s and 94.
- In FTSE 100 companies, Chairmen are most likely to be appointed from within their own boards.
- Chairmen of FTSE 250 companies have served on boards the longest, with an average of 18.9 years.
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