Earlier this month, the 30% Club investor group met to discuss board refreshment, human capital reporting & next steps for change.
The good news is that the goal set by Lord Davies to have 25% of women directors on FTSE 100 boards by the end of 2015 is within reach.
Given the current rate of director turnover and proportion of new appointments going to women, the year end outcome will lie somewhere between Lord Davies’ target and the 30% Club’s slightly more ambitious one.
But are there opportunities to speed things up? Recent data from BoardEx shows that out of 839 non-executive FTSE 100 directorships, 83 NEDs – 10% – have served on the board for more than nine years, the maximum recommended term under the UK Corporate Governance Code. Of these, 74 are men.
Opening up some of these positions to well-qualified women, as suggested by the Cranfield 2014 Female FTSE Board Report, would accelerate what’s already been significant progress. Good news for everyone keen to see more effective boards.
Which is why it was disappointing to read the analysis published last week by Financial News which highlighted that, despite a huge push to get more women on boards, newly listed companies continue to be more male-dominated than established ones.
Of the 206 board members on companies which floated on London’s main market, just 28 – or 13.6% – were female.
As the 120 +chair supporters of the 30%Club put it, the board dynamic and decision-making process are better when there’s a better gender balance. So it is a shame that the boards that are being appointed before coming to market are not reflecting this thinking in their composition.
We discussed newly listed companies at our 30% Club investor meeting, and one suggestion was to focus on the many advisors to IPOs with a view to ensuring that diversity features in early conversations about board composition.
Investors too can play their part by signalling a focus on gender diversity. After all, it is often those companies which “get” this particular issue that also tend to be more forward-looking on other aspects of good governance.
Emma Howard Boyd, Chair, 30% Club investor group