Cranfield Female FTSE Board Report 2016

Concluding Remarks

The Female FTSE Board Report 2016

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This year’s 2016 Female FTSE Board Report reveals that the pace of change has stalled in the aftermath of the Davies closing report. The overall percentage of women on FTSE boards has increased compared to March 2015 (the date of our last Female FTSE Report), but it is similar to that of October 2015 (the date of the Davies closing report). Other key indicators of progress have slipped back; board turnover rates have decreased and a smaller share of new appointments went to women in the six months from September 2015 to March 2016. Progress against the new target of 33% for FTSE 350 companies can be achieved only if the pace of change picks up again. On a more positive note, there are no all-male boards left in the FTSE 100, and there are only 15 all-male boards in the FTSE 250. The report also examined gender balance below board level, across FTSE 100 Executive Committees. We found that women hold only 19.4% of Executive Committee roles, and that they are more likely to hold functional roles, rather than operational and C-suite ones. This suggests that issues around the pipeline of female talent need to be addressed with urgency going forward. We look forward to the work of the new review in this area, under the stewardship of Sir Philip Hampton and Dame Helen Alexander. In this report, we make the case for the usefulness of voluntary gender targets. Several case studies included in this report showcase how organizations are using gender targets to create cultural change. We outline key issues to be considered for future action: –– The focus on boards must be preserved as the pace of change has not kept up after the Davies closing report. Chairmen and search consultants must ensure that boards are continually refreshed and that we return to a board turnover rate of at least 14%. A larger share of new appointments must go to women, and the board appointment process must remain robust, transparent and gender-inclusive. Organizations must ensure that women not only get on boards, but actually reach senior roles such as Senior Independent Director and Chairman. –– Greater attention should be paid to the female pipeline. Women are under-represented on FTSE 100 Executive Committees, especially in operational and C-suite roles, compared to functional roles. Future action should consider how organizations can develop talented women more effectively and how they can encourage more of them to take up operational roles. –– We need more robustness and transparency in reporting gender composition at Executive Committee level and below. Companies should be encouraged to monitor and report gender balance across all seniority levels. –– Metrics and targets are effective tools to create a disciplined approach to gender balance and cultural change in organizations. In this report we lay out principles of target setting and provide case studies of organizations that use voluntary gender targets. We invite other FTSE companies to consider how such measures might help them achieve progress towards gender balance in senior management ranks and below.