UK boards stall in recruitment of female directors

Survey finds hires fall for first time as Britain lags behind Europe

The rate at which women are being promoted to the boards of the UK’s largest companies has slowed for the first time.

Women made up 29 per cent of hires to UK boards last year, down from 32.1 per cent in 2014 and 31.6 per cent in 2012. This compares unfavourably to western Europe where women were 35.4 per cent of hires to boards, and France, where the figure was more than 57 per cent.

In the US, board diversity has stagnated, with women making up a fifth of boards, a 1 per cent increase since 2012.

The findings, from biennial research by headhunter Egon Zehnder, come as fears grow among promoters of workplace diversity in the UK that the momentum to get more women into senior business roles has slackened.

Having achieved the government’s goal of filling a quarter of FTSE 100 board places with women by 2015, the women on boards review is now targeting that a third of board positions at Britain’s 350 largest public companies be made up of women by 2020.

However, not only has the rate of female board appointments dropped to below the level of 2011, when the 25 per cent target for the FTSE 100 was set, but the number of women on FTSE 100 executive committees has flatlined.

“A modern organisation is only as successful as its leadership’s ability to navigate a near-constant state of change and the momentum for achieving gender parity is simply not occurring at the pace of progress required,” said Rajeev Vasudeva, chief executive of Egon Zehnder.

Outside the UK, the data showed some progress. Just less than a fifth of seats on the boards of the largest companies globally were held by women, up from about 14 per cent in 2012, and the proportion of companies with at least one woman on the board reached 84 per cent in 2016, up from 76 per cent in 2012.

However, the overall global ratio of male to female directors for new appointments remained on average at three males to one female. In Russia, the rate is nearly eight to one and in China it is 18 to one.

Nine of the top 10 countries in terms of the progress made towards board diversity between 2012 and 2016 were in western Europe.

Of the 44 countries where the research was conducted, 16 had an average of three female directors per board, a level that Egon Zehnder believes is the “critical mass . . . boards needed for transformative and sustainable change”.

In 11 of the countries, at least half the boards studied had no women at all. These included Russia, South Korea, Saudi Arabia, Czech Republic and United Arab Emirates.

Men held 95 per cent of board chair roles in 2016, down slightly from 96 per cent in 2014. Women hold just 4 per cent of chief executive roles and 11 per cent of chief financial officer roles globally.

Egon Zehnder examined board data for 1,491 of the largest companies across 44 countries globally with market capitalisation exceeding €6bn. It first conducted the research in 2004.

Source – Written by Sarah Gordon, featured in Financial Times – https://www.ft.com/content/620b634e-ed51-11e6-930f-061b01e23655