Cranfield Female FTSE Board Report 2016

Targets for Gender Balance

The Female FTSE Board Report 2016

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Throughout our research at board level, we found that certain metrics highlighted critical obstacles to change. For instance, by monitoring the share of new director appointments going to women, it became apparent that they had to increase to about one third for FTSE 100 companies to reach the 25% target; by monitoring tenure of NEDs, we found that several NEDs exceeded the recommended six year tenure, thereby reducing the board turnover rates necessary for change. Moving forward, we suggest that board- level metrics should remain in place and be matched by relevant and creative metrics below board level (Executive Committee and the pipeline).

5.3 WHAT TARGETS AND METRICS ARE HELPFUL MOVING FORWARD?

In this next stage, we need to sustain the focus on board level and identify relevant metrics and targets that need to be considered below board level. We outline below a checklist of metrics and possible voluntary targets that could be adopted.

TABLE 17. METRICS AND TARGETS FOR GENDER DIVERSITY

Level

Metrics companies should collect

Possible targets

–– 33% women on board (target proposed by the 2015 closing Davies report and endorsed by the government) –– % women executive board members –– 30% women on long lists of candidates for NED positions (as required by the Voluntary Search Code since 2011)

–– % men and women –– % men and women across executive and non-executive roles –– % male and female directors sitting on Audit and Nominations board committees –– % women Chairmen across FTSE 350 –– % women Senior Independent Directors across FTSE 350 –– Board turnover rates –– % new appointments going to women –– % women on long lists in new board appointments –– % women shortlisted in new board appointments –– % men and women –– % men and women in operational and support ExCo roles –– % men and women who were internally promoted to ExCo positions –– % men and women at different seniority levels – clarify definition of ‘senior management’ in annual reporting –– % men and women in different business units –– % men and women in different functions developmental opportunities (e.g. challenging assignments, leadership development programmes, mentoring and sponsorship, expatriate assignments) –– % men and women recruited –– Retention and turnover rates for men and women –– % men and women promoted –– % men and women afforded

Board

–– % women on short lists of candidates for NED positions

–– % women on ExCo –– % women in operational roles

Executive Committee

–– % women direct reports to ExCo –– % women at various senior management ranks –– % women promoted should reflect gender split in available internal candidate pool (proportionality in promotions) –– % women given developmental opportunities should reflect or exceed the gender split in available internal candidate pool –– % women recruited at entry level should match % women in labour market

Below Executive Committee

Our 2015 Female FTSE study highlighted that whilst FTSE Chairmen have largely taken up the challenge set by Lord Davies and increased the number of women on boards, CEOs now have to tackle the issue of women’s representation throughout the pipeline with the same urgency, discipline and accountability.