Women on boards: have targets worked?
Headlines from the latest instalment of Cranfield School of Management’s annual Female FTSE Board Report shows gender representation targets are likely to be met, but more progress is needed.
On track to meet the target
Cranfield School of Management’s research, led by Sue Vinnicombe, Professor of Women and Leadership at Cranfield University, found that against targets of 33% of women on boards for FTSE 350 companies by December 2020:- the percentage of women on FTSE 100 boards has increased from 32% to 34.5%, with 324 women holding 355 directorships. In 2011, this figure was just 11% and 122 directorships. The percentage of female non-executive directors (NEDs) is at an all-time high of 40.8%, with the percentage of female executives rising slightly to 13.2%.
- female directors of FTSE 250 companies has risen from 27.3% to 31.9%. The percentage of female NEDs is 37.6%, but the percentage of female executive directors (EDs) is low at 11.3%.
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‘More women needed in influential roles’
Commenting, Professor Sue Vinnicombe, said: “It is not sufficient just to have a critical mass of women Non-Executive Directors on a board in order to increase the number of women in the executive pipeline.“There need to be women in influential roles such as Executive Directors. The added dimension of Covid-19 means organisations must be pro-active to address the long-term impact of the pandemic on women’s careers. With more focus on flexible working and wellbeing, it is an opportunity to progress the diversity agenda.”Why is diversity and inclusion important to business?
Boards with greater diversity – encompassing gender, race, age, and disability status, among other factors – have a wider world view. This means they are better placed to make decisions more in tune with social changes and trends in the marketplace.Proprietary research by the World Economic Forum echoes other studies in showing that “top-quintile boards tend to have more female directors than their bottom-quartile counterparts”.Do targets for diversity and inclusion work?
The research team behind Cranfield School of Management’s Female FTSE Board Report also investigated how targets are being used in practice. It found:- most organisations adopted voluntary targets because previous diversity initiatives had failed.
- little resistance to targets and gender targets as they have become relatively normalised in the UK.
- despite the emphasis on realistic targets, more ambitious targets were sometimes seen as a way of mobilising organisations into action, even when they are not fully met. The trend was a target of 30%-40% women in senior leadership roles.
- Targets are a tool for culture change. When implemented thoroughly and ambitiously, targets created scrutiny and unrooted bias across key talent management processes.
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