A report from the Equality and Human Rights Commission (EHRC) found that 61% of FTSE 350 and 45% of FTSE 100 companies failed to hit their targets of having 25% female representation at board level.
The EHRC labelled the variation in individual company performance on this measure as ‘inexcusable and inacceptable’ and says ‘too few companies are taking action for improvement such as setting targets or encouraging applications from women’.
Currently, only 38% of boards set concrete objectives or targets to increase the number of women on their board, despite more than three quarters (76%) having a board diversity policy.
The report also found that apparent progress on female board representation may actually be masking the true picture, with fewer than half (47%) of companies increasing their female board representation over the period covered by the inquiry, while 46% of boards either remained the same or even decreased the proportion of women.
Of the companies that increased the proportion of women on their boards, almost one third’s (31%) overall board size was reduced, rather than more women being appointed.
Equality and Human Rights Commissioner Laura Carstensen said:
Despite welcome progress and vital work by Lord Davies, our top Boards still remain blatantly male and white, with inexcusable and unacceptable discrepancies between companies.
The good work of a forward thinking minority masks that many top businesses are still only paying lip service to improving the representation of women on boards.”
The best companies are showing that having talented women on their boards is boosting both performance and fairness. Unfortunately the recruitment practices of too many businesses still remain trapped in permafrost and that’s holding back women and ultimately the companies themselves.”
Fuelling the gender pay gap
For executive roles, the position is even more stark. Nearly three quarters of FTSE 100 companies and 90% of FTSE 250 companies had no female executive directors at all on their boards during the period surveyed by the Commission.
Old boys’ network to blame
The EHRC pointed to the outdated ‘old boys’ networks’ as one of the key reasons behind the low number of women on British boards.
Nearly a third of companies (32%) reported largely relying on the personal networks of current and recent board members to identify new candidates and a similar proportion of companies using personal networks did not use any other means of advertising the post.
The diversity of applicants is also potentially being limited by virtually no open advertising of board roles – just 2% of companies publicise non-executive roles on their websites, in newspapers or on social media.
The inquiry also found that job descriptions often rely on vague terms like ‘chemistry’ and ‘fit’ rather than clearly defined skills and experience, limiting the potential diversity of candidate pools and standing in the way of women’s chances of appointment.
Despite the headline progress for the Index as a whole, the inquiry reveals that too few companies are taking action for improvement such as setting targets or encouraging applications from women.
The report also highlights good practice and makes recommendations for improvements. These include:
- Conducting board evaluations and setting aspirational diversity targets for appointments, supported by policies and action plans.
- Ceasing reliance on personal networks and instead publicising roles through a wide range of channels, and using positive action to improve the diversity of the candidate pool.
- Establishing training, development and leadership programmes to improve the proportion of women at all levels of the company and improve the diversity of the pipeline for senior appointments.
- Using networking, mentoring and sponsorship programmes to encourage and support women to put themselves forward for board roles.
- Adopting management practices that support women’s career progression such as flexible and part-time working at senior levels.
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[tweetthis]Survey reveals FTSE 350 gender diversity ‘inexcusable and unacceptable’[/tweetthis]