The issue was a timely one because a new independent report has just been released that examines the level of representation of women on FTSE 100 boards.
In a speech to launch the publication of a report by Sir Philip Hampton and Dame Helen Alexander, Business Minister Margot James and her colleague, Caroline Dinenage told the audience at KPMG in London, “When we draw on men and women, from a variety of ethnic and social backgrounds, it makes a difference. We all benefit from more diverse perspectives – not only encouraging better dialogue, but better decisions and better leadership.
“It also helps to build trust. When the people at the top table reflect the people that work for them and the customers they serve, there are better results. There is the feeling that businesses are serving their social purpose and operating for the benefit of the many, not just the privileged few.”
Figures have doubled in the past five years - but it's not enough
The minister continued, “We have made a start, doubling the proportion of women on FTSE 100 boards from 12.5% in 2011 to almost 27% today.
“But for women to be truly represented in business they need to be in top executive positions. And if we want to have more women on boards, we need to ensure that talented women have a clear path to get there.
Attendees heard that this is the first time that figures have been collected on the number of women in the top two levels of decision making in the FTSE 100 and FTSE 250. They showed that almost a third of FTSE 100 senior appointments in 2015 went to women. Already a fifth of the FTSE 100 are either meeting or exceeding the 33% target identified by the review.
Ms James said that “This clearly proves that it’s perfectly possible for at least a third of senior positions to be filled by women. Nor should it be a stretch to see at least two-fifths of appointments to operating committees and direct reports going to women.” But she said, it is important to build on these advances.
“We know that women are outperforming men at all levels of education, except for the fact that they are under-represented in the STEM subjects. Indeed, 10% more women than men enrol in higher education, a gap which is so significant that there are calls for the playing field to be levelled.
“Yet despite this difference, most graduate recruitment programmes are achieving gender balance. And despite equality of qualifications, as we go up the ladder there are fewer and fewer women.
“Even if women are able to get into positions of power, they are frequently at a disadvantage compared to their male counterparts.
“And even where women aren’t directly discriminated against in their work, on average they still earn 18.1% less than male colleagues. All these factors mean that women are being discriminated against, as their careers progress, and business and society continue to lose out on female talent.”
Not just an issue for the boardroom
The minister urged businesses to “look at what is happening at every level of their organisation. To collect data. To set expectations. To make sure that women are able to get the experience, development and support they need from an early stage in their careers to be able to move into leadership roles.
“While the review has identified a target for FTSE 100 companies, I hope to see all businesses – whether in the FTSE 250, privately owned or partnerships – to take action”.
Launch of a new scheme with influential sign-ups
What I want to see is demonstrable corporate responsibility and greater public recognition for business as a force for good. To achieve this, more inclusive boardrooms are crucial. Ms James then went on to announce a new initiative, reiterating that since 2014, the UK government has been piloting a scheme to help talented women get the experience they need to get their first board appointment.
So far, she said, the scheme has placed 10 women in training positions on the boards of public sector partner organisations, while a similar scheme, called Board Apprentice, has been doing the same in the private sector for all under-represented groups.
The minister said that the response from participating boards, women and their employers has been “overwhelmingly positive” and that a number of the women who have taken part have already secured full board appointments.
The two projects have now been combined into the Future Boards Scheme, which has been launched in partnership with the 30% Club. The scheme gives women from a wide range of backgrounds the opportunity to spend 12 months with boards in a developmental capacity.
Ms James also announced that Hammerson, Aviva and the Student Loans Company have all signed up to be founding members of the Future Boards Scheme.
The CIPD responds and welcomes the new targets
The CIPD (the professional body for HR and people development) responded to the independent review when Laura Harrison, people and strategy director for the CIPD, said, “The new voluntary target for 33% of FTSE 100 executive pipeline positions to be held by women is a welcome step forward. This raises crucial issues about how employers can build strong and sustainable frameworks to encourage good female representation across organisations. However, for more women to hold senior roles, businesses need to build clearer pathways to help them progress, starting from the bottom up.
“Building a senior female executive talent pipeline will not happen without nurturing and progressing female talent at every level of the organisation. We need organisations to be thinking about progression opportunities at every stage of women's careers. Less than half of organisations currently monitor gender diversity at all levels. To make real progress, companies need to monitor and understand how women are being recruited, developed and promoted, how many are leaving and from what roles and functions as well as how many women are returning from maternity leave. Only then can they put in place a meaningful and inclusive talent strategy to progress women.
"The introduction of a target for the female executive pipeline makes it even more relevant to extend this approach to executive posts in the boardroom itself. Executive female representation in FTSE 100 boardrooms still stands at less than 10%, underlining the clear need for a separate target for female executives in FTSE 100 boards and the wider FTSE 350. It is the influence of female role models in executive positions that has the potential to create the greatest sea change in organisational culture and practices in relation to gender diversity. We need to see much bolder action at all levels of every business. Only then will organisations be able to benefit from the capability and potential of all of the workforce."