UK improves female board representation, amid 3% global rise

15 June 2017 Consultancy.uk

A Deloitte report has found a 3% rise in women in boardrooms across the globe, with women now totalling 15% of executives worldwide. The UK has seen a 5% increase of female representation since 2014, but is still shy of the target set by Club 30%, while the United States continues to see little progress in this respect.

Diversity within the boardroom has become an increasingly important issue for businesses globally, both in terms of the business case, in terms of compliance, and, increasingly, in terms of wider social trends towards inclusive practices – with female role models able to encourage other women to participate in the business world.

In a new report from Deloitte, titled ‘Women in the Boardroom: a global perspective’, the consulting firm explores global changes in the boardroom related to changes in female participation. The research involving 7,000 companies over 44 countries and more than 72,000 directorships, also examined current policies put in place to positively affect the number of women in the boardroom in various countries, where applicable.

North America female representation profile

The global picture painted shows relatively slow movement in the number of directorships in the hands of women – at 15%, up 3% on 2014. The slow pace, the consulting firm attributes to the relatively low-turnover rate of directors and the recency of policy initiatives. The average number also hides that some countries have made significantly more advance, than others.

North America

In North America around 14.5% of all board seats are held by women, while 3.8% of board chairs are women. In terms of board committee presence, women are slightly more represented than at board level in terms of membership, at around 17%, and have considerably more representation at committee chair level, at around 15%.

The US female representation profile

The US

The US has a below average profile for the number of women on company boards in the country, at 14.2%, while the number of board chairs stands at 3.7%. The country continues to see few women at the pinnacle of businesses, with 4.6% of CEOs, women.

Committee level has similar levels have slightly higher seat uptake than boardroom positions overall, particularly in terms of chairing committees. The top industry in the US for female boardroom representation is consumer business, with 13% noted in TMT.

Some US states have introduced policies to encourage businesses and women to take up board membership. While others have begun to use their position as investors to pressure companies to increase female board representation. The report found the US as a whole lacks clear policy guidelines however – with efforts tending to be at the local government level.

Europe female representation profile

Europe

With 22.6% of board members being female, Europe as a whole scores above average by the standards of the paper, and considerably above the level of North America. Women in Europe were also found to be relatively well represented on committees – at around 3% above the level of wider board membership, while those chairing committees were well out ahead of board chair levels. Board chair performance remains relatively poor in the region however, at 4.4%.

The EU has become more active in the situation, for which it is developing a Directive to improve the selection process in favour of diversity. The move includes a target for under-represented genders, a neutral selection process, as well as member state levied sanctions on companies for non-compliance. Current EC too has begun to focus on improving equality among its ranks.

The UK female representation profile

The UK

The UK meanwhile increased the number of female board roles by almost 5% since 2014, to average 20.3%. Consumer business score highest on 23%, while TMT continues to see a relatively low 19%. The region has relatively high level of female committee level participation, although committee chair positions haven’t followed suite.

The UK has taken various initiatives to improve the outlook for women at director level – although no concrete quotas. The UK Financial Reporting Council, for instance, has published a corporate governance code that requires diversity reporting, while in addition Lord Davis ran an independent enquiry into current conditions for gender equality in businesses. Further efforts include Club 30% that aims to bring board representation in the UK, and the US, up to 30%.

Commenting on the report’s findings for Britain, Nicki Demby, a Partner and Leader of Deloitte UK’s Women on Boards Development Programme, said, “The United Kingdom has made good progress on women's representation on boards without using quotas. Every FTSE 100 company has at 'east one woman on the board and there have been increases in the number of women non-executive directors on the boards of FTSE 250 companies. One of the greatest achievements of the past few years is that business no longer asks why women's representation is so important, but rather how they can make gender diversity a reality.”

The Netherlands female representation profile

The Netherlands

The Netherlands has a similar profile to the UK, with 21.4% representation – up 4% from 2014 – while around 5% are board chairs. Compensation and risk have the highest levels of representation, while financial services has the highest number at 23%.

Initiatives in the Netherlands include the 2013 Dutch Management and Supervisory Act' which created a voluntary framework to boost numbers. The policy was extended in 2017, although low uptake so far has prompted the government to indicate that future extensions may come with teeth.

Caroline Zegers, a Partner at Deloitte Netherlands said she expected a period of mandatory requirements may have to be imposed before total gender parity is achieved, stating, “While we expect the increased attention to have a positive influence on awareness around the topic of women in the boardroom, there is doubt as to whether this is enough to provide for sufficient board diversity and gender equality in the years to come."

×

Women remain underrepresented in UK's hospitality industry leadership

12 April 2019 Consultancy.uk

Female engagement at the top level of the UK hospitality industry is still lagging, with the vast majority of decision-making roles continue to be held by men. Only 7% of the industry’s FTSE 350 CEOs are women; however, the pay gap in hospitality and leisure is far better than in other industries, at a median of approximately 7%.

The hospitality, travel and leisure (HTL) sector is one of the UK’s largest employers, with 3.2 million people working in its segments. Despite a poor 2018 in terms of tightening consumer spending, the industry is still one of the top sectors in terms of economic activity, hitting £130 billion last year – besting the UK’s automotive, pharmaceutical and aeronautical sectors’ combined activities.

While the industry is one of the country’s largest employers, it still faces considerable issues around diversity at the top. New analysis from PwC has explored the matter, as well what initiatives the industry has engaged to open up its top ranks to a more diverse background.

Female representation at board level for UK companies and HTLs

According to a survey of CEOs, Chairs or HR Directors of over 100 of the most significant leisure businesses across the UK, the hospitality industry has a relatively male-dominated top level. This lags behind the FTSE 100, where companies have female board level representation at 32.2%. Meanwhile, the figure for the combined executive committee and direct reports stands at 28%. This is well above FTSE 250 levels, where female board level representation stands at 22.4% and executive committee & direct reports stand at 27.8%.

For the hospitality industry as a whole, board level representation came in at 23.6%, with FTSE 350 for the industry performing slightly better at 25.1%, while non-listed companies performed considerably worse at 18.2%. The firm notes that the figures hide that while some companies are making strides to improve equality, others are not moving forward – with the positive result reflecting more often the good work of some, while others are not taking the issue seriously in their agenda setting.

Blind spot

The study states, however, that while the overall numbers are relatively strong, the industry has a number of acute weaknesses. These include CEO numbers, with only 7% of HTL FTSE 350 companies helmed by women and 11% of non-listed companies led by female CEOs. Meanwhile, female chairs at FTSE 350 companies for the sector stand at zero. In terms of wider diversity representation, only 1 in 33 leaders at industry companies is from a BAME background.

Pay gap for HTL and hospitality

The report noted discrepancies between FTSE 100 companies and FTSE 250 in terms of improving the number of women at executive level. The majority have met the Hampton-Alexander Review target of 33% women at board level, up from around 25% in 2016. However, the remaining ~40% are not on target, and are unlikely to meet the target by 2020. A similar trend is noted when it comes to executive committee and direct reporting numbers.

Jon Terry, Diversity & Inclusion Consulting Leader at PwC, said, "To make real progress in diversity and inclusion, businesses need to elevate it onto the CEO’s agenda and align diversity & inclusion strategy to the fundamentals of the business."

Tracking progress FTSE 250 level

However, one area where hospitality travel and leisure companies are outperforming other companies in the wider UK economy, is the mean and median pay gap between men and women. PwC found that the median of the wider UK economy comes is approximately 14% – with upper quartile companies noted for a gap of low 20%, and lower quartile companies noted for differences of around 2%.

The median pay gap for HTL comes in at well below 7%, with the median close to parity. There are considerable differences, however, with hospitality at 7%, while travel comes in considerably higher, at 22%. The latter figure reflects fewer women in higher paid pilot and technical positions within the industry.