UK improves female board representation, amid 3% global rise
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.
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
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
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
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
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."
