2011 seems a long time ago now. It was the year of summer riots, HMV stores closing (a portend of future high street travails later in the decade) and, in a breakthrough for gender diversity, the Royal Navy appointed the first female warship commander in its history. The latter event was certainly long overdue but the composition of the Boardrooms of the UK eight years ago seemed to belong to a different decade in terms of gender diversity.
The Boardroom is where strategic decisions are made, governance applied and risks overseen. It has been widely acknowledged that Boards should be made up of competent and high calibre individuals who together offer a mix of skills, backgrounds and experiences. However, in 2004 less than 10% of the Boards of FTSE 100 companies were women. By 2011, that had barely nudged up to 12.5% and was something the 2011 Davies Review was determined to do something about, particularly given the figure for FTSE 250 companies was 7.8% for the same year – a pitiful figure given women are 46% of the economically active population in the UK.
Of course, this is not a gender numbers game. McKinsey’s research in 2007 is but one significant part of an overwhelming body of evidence which has consistently shown that strong stock market growth among European companies is more likely to occur where there is a higher proportion of women in senior management teams. Norway, France, Sweden and Australia were quick to catch on to this and then, more importantly, do something about it.
Fast forward to 2019 and the Royal Navy has been named as a top 50 employer for women in The Times, the high street is still struggling and Brexit is the issue bringing people out onto Britain’s streets but the gender diversity of Britain’s Boards is finally changing. The drive following the Davies Review and the subsequent Hampton-Alexander Review gave targets where targets were needed and pressure just about everywhere else. Women now constitute 32% of FTSE 100 boards and 30% of 250 FTSE boards with companies such as Burberry Group PLC, Next PLC, Cineworld Group PLC, and Morrison Supermarkets PLC showing the way overall. There are now only two FTSE 350 boards made up of only men and now just 42 that have only one woman on their board.
The equivalent figures going back to 2011 look shocking now but much remains to be done – from all sides of the recruitment table. These genuine quotations released by the Department for Business, Energy and Industrial Strategy in 2017 are a stark reminder of this:
“We have one woman already on the board so we are done”
“I don’t think women fit comfortably into the Board environment”
“Most women don’t want the pressure of sitting on the Board”
The recently published 2019 Hampton-Alexander Review acknowledged progress but said a “step change” was still needed. Whilst there are over 900 women serving on FTSE 350 boards providing an ever increasing talent pool of women with substantial board experience, only 25 women have been appointed into the chair role. Moreover, in terms of executive committees, based on current rates of progress it will take until 2090 to achieve gender parity – reason enough for all of us to double our efforts for the next eight years.
Jonathan Swain leads the Board and Diversity Practices at McLean Partnership. For a confidential discussion, please contact Jonathan on JonathanSwain@mcleanpartnership.com or on 0203 597 6410.