Glass ceiling remains as UK director positions less than quarter female
Diversity outcomes continue to fall short across the UK’s top business, while corporate diversity policies are becoming increasingly vague, thereby disguising the lack of improvement in board representation. 140 boards in the FTSE 250 have less than 25% female directorship.
Diversity has become a key watch-word in British business discourse in recent years, with numerous companies looking to attract talent from different gender and ethnic backgrounds, as a matter of good business sense as much as from an ethical standpoint. Recently, this saw top professional service companies EY, PwC and Deloitte voluntarily publish their pay-gap figures for gender and ethnicity, in order to illustrate how they had improved in these areas.
However, while notable firms are making an effort to address gender inequality, a new report from Grant Thornton into company governance across the UK’s largest companies has shown that members of the FTSE350 continue to drag their feet when it comes to practical implementation of diversity policy. The research asked board level respondents a range of questions pertaining to their stance on diversity within their board remit.
Respondents returned a mixed bag result when it came to the female representation on boards. Interestingly, the FTSE 100 has managed to considerably outperform the wider FTSE 250 when it comes to such representation.
The number of female directors has increased slightly for both groups, at around 27% for FTSE 100 business and 20% for FTSE 250 businesses, reflecting little change from the previous year. Companies with at least one female director remain at around 100% for FTSE 100 businesses and are up slightly to 95% for FTSE 250 businesses. However, while FTSE 100 businesses have around 60% of businesses with more than 25% of their board directors female, the number has actually fallen in FSTE 250 businesses, to around 25%. When it comes to companies with more than a third of directors being female, the number plummets for both FTSE 100 and FTSE 250, to around 23% and 14% respectively.
When it comes to reporting on diversity in detail, in the company policy for diversity, a drop has been noted. In 2014, there was detail at 30% of FTSE 250 and 28% of FTSE 100 companies. However, in the intervening years detailed reporting has decreased significantly at FSTE 250 companies, to 11.2% in the latest survey.
The consultancy firm notes that the low level of detail, as well as the poor performance of FTSE 250 companies, is not an ideal indicator for the segment meeting the Hampton-Alexander target of 33% of women on boards by 2020. With around 140 currently on less than 25%, and with little external pressure to change, the milestone appears relatively distant.
The lack of reporting also contrasts the increased regulatory scrutiny of the industry focused on improving the representation of women, and other people of diverse background across all management levels. The research highlights that, as it stands, there is a long-way to go to reach even close to parity levels, particularly in technology and industrial and related sectors.
There is presently no single sector where women fare better than around 33% of total positions in senior management, with the average hovering at around 25%. Oil and gas is by far the least likely to see a female face at senior management level, at around 15% of the total. Customer service and healthcare are the outliers, although both have a much larger pool of talent to draw from, with around 50% of staff at each being female.
Wider diversity
While gender diversity has received considerable press in recent years, this year has seen increased concern around wider diversity as well, from Black, Asian and Minority Ethnic (BAME) to social mobility issues. The research finds that, across most boards, wider aspects pertaining to diversity are gaining traction, with a steady build up of board meetings over the past four years. FTSE 100 companies have led the charge, with around 90% being active in the latest survey, up somewhat from 60% in 2014. FTSE 250 companies, meanwhile, have seen a considerable leap in attention paid to wider diversity, up from 32% in 2014 to 86% in the latest survey.
When it comes to wider diversity being discussed, skills and experience are the winners by far, at 65%. This is followed by ethnicity, nationality and race. Disability comes in at 7.1% of mentions, while age stands at 12%.
Concluding the report, the researchers said, “Perhaps a reflection of a practical rather than regulatory-driven need for wider diversity on boards in an increasingly connected, global marketplace. While we see an increase in the number of companies discussing wider diversity, there has been a drop in the quality of reporting. This is of concern if boards are to meet the target of ‘Beyond One by ‘21’ set by the Parker Review27 in 2016, or embrace board diversity more widely.”
There are some examples of companies determined to reach such targets. Earlier this year, Brickendon Consulting announced that they aimed to make their senior management team 50% female by the end of 2019. However, many leading corporations remain slow to act on gender parity, with UK broadcast giant BBC exemplifying this, coming in for substantial criticism for its huge pay-gap, which saw top male staffer Chris Evans earn a huge £2 million per year, compared to top female earner Claudia Winkelman, who picked up a much smaller £500,000 cheque. The BBC had previously committed to ending its gender pay gap by 2020.
