UK boards lag behind their US counterparts when it comes to professional and sector diversity, according to new research undertaken by Oxford Brookes University’s Centre for Diversity Policy Research and Practice commissioned by the 30% Club Higher Education Working Group and co-sponsored by KPMG in the UK.
“Changing Places: Women on Boards” is the first major UK study into the exchange of board-level talent between business and academia. It found that movement between these two sectors is far more frequent in the US as academic Non-Executive Directors (NEDs) interact much more with businesses, government and other organisations outside academia than their UK peers. In fact, US company boards are over seven times as likely to include a senior academic compared to boards in the UK, showing that British business is overlooking talent in higher education.
There are currently just eight academic NEDs on the boards of FTSE 100 companies, whereas there are at least 59 academic directors serving on Fortune 100 boards in the US.
UK board chairs interviewed for the research saw two major areas where academic NEDs can make a valuable contribution: where the academic expertise matches the company focus and where they bring university executive leadership to company boards. However, they also highlighted an informal bias against having academics on corporate boards, expressing concern that academics might argue on intellectual rather than commercial lines and hamper board discussions.
Commenting on the findings Melanie Richards, Vice Chair at KPMG in the UK, said:
“We need to move the diversity debate on from focusing solely on gender and better reap the benefits of having a mix of professional and sector backgrounds on UK company boards.
“There seems to be a degree of caution from corporates that bringing senior academics into the boardroom may result in longer deliberations for certain issues. However, by bringing together a more diversified group, business may benefit from more thoughtful discussions, which should strengthen the quality of decision making and outcomes.
“It is clear that academia remains a largely untapped talent pool for UK plc and there is much work to be done to promote mobility in both directions. Businesses need to open their eyes to the advantages of a more diversified board and the capabilities that senior academics, both male and female, can bring.”
The study also highlighted that the flow of female talent from business to university boards is relatively healthy compared to female academics entering corporate boardrooms. 33% of women on university boards come from the private sector whereas less than 2% of female NEDs in the FTSE 100 come from academia. This means cross-sector mobility also has huge potential to improve the gender diversity of boards.
Added to this, higher education is more gender diverse than business with women holding nearly 40% of university boardroom roles. By widening their search to include senior academics, UK corporates would also be significantly widening the pool of female candidates.
This reinforces the point made in the Davies Review more than five years ago that women from academia are currently being overlooked as corporate board members. Nevertheless, there is a strong case for companies and universities to draw on each other’s female talent to achieve a double boost for gender and professional diversity.
Anne Richards & Elizabeth Passey, co-chairs of the 30% Club Higher Education Working Group, said:
“From our own experience, we know business leaders and senior academics gain a huge amount personally from collaborating with each other: the evidence in this new report shows how UK employers also have a great deal to gain from achieving more professional diversity on their boards, whether those of companies or academic institutions.”
Professor Simonetta Manfredi, Professor in Equality and Diversity Management and Director of the Centre for Diversity Policy Research and Practice at Oxford Brookes University, commented:
“The corporate and the higher education sectors share a common goal of increasing gender diversity on their boards. Therefore, there is a compelling case for these two sectors to tap into each other’s female talent pipeline. The report shows that many business women bring their skills to university boards. However, the talent of senior female (and male) academics remains largely untapped in contrast to the US where many more companies with academic non-executive directors.
“There has been good progress in improving equality in recent years for both academic and corporation boards, but more work needs to be done. Through this report, I hope we can build on this momentum and encourage businesses to seize the opportunity to benefit further from the skills and knowledge of senior academics.”
Overall, the study points to strong social and economic arguments for women to ‘change places’, especially from academia to the private sector. In order to achieve this, the key is improving relationships not just between institutions, but also between individuals.
The study ends with some practical suggestions to achieving this:
- Promote business understanding of academic capabilities.
- Increase academic participation on company boards.
- Encourage more women to apply for university board roles.
- Advise women to think about board roles earlier.
- Help recruiters to understand female career patterns.