The women in suits: how big is the gender bias in the City?
"Government figures, published today, show that the proportion of women directors in FTSE 100 companies has risen from 10.5% to 17.3% since 2010."
The Independent, 10 April 2013
"A Government-sponsored report will today show that the number of women appointed to FTSE 100 boards has plunged from 44% to 26% in six months."
Daily Telegraph morning business briefing, 10 April 2013
The Square Mile, and more broadly British business, is accustomed to accusations of sexism. It's argued by some that the boardroom remains a place where the old boys' network flickers into life, with very few women smashing their way through the glass ceiling.
In 2011 former trade minister Lord Davies proposed in his Women on Boards review that by 2015 women should represent at least 25% of the board members of FTSE 100 companies.
A report published in the last few days by the Cranfield University School of Management prompted the recent media interest. According to the Daily Telegraph, the School is the Government's official monitor of the number of women on company boards. It sources its data from the BoardEx database, annual reports and corporate websites.
Jobs for the boys?
Among the FTSE 100 - a list of the 100 biggest UK companies listed on London's Stock Exchange - there has been little change in female representation at both Executive Director and Non-Executive Director (NED) level.
How does this fit with the Independent's claim that "the proportion of women directors in FTSE 100 companies has risen from 10.5 per cent to 17.3 per cent since 2010"?
If we refer back to Lord Davies' original report, the 10.5% looks like a typo on the Independent's part, since in 2010 women accounted for 12.5% - not 10.5% - of FTSE directors (both Executive and NEDs).
By 2011 this figure stood at 15%; in 2012 it was 17.3%.
However, as the Cranfield School of Management observe, "somewhat less encouraging is that these figures have not improved in the past six months".
Comparing snapshots, in September 2012 the proportion of women board members weighed in at 17.4%. In March 2013, the proportion has barely changed - at 17.3%.
However, certain statistics do suggest that UK businesses are adapting: a quarter of the FTSE 100 companies have already hit the target of 25% female board members. On the flipside, there are seven companies with all male boards (although there has been a two thirds reduction in this number in the last two years).
While it's not subject to the target suggested by Lord Davies, the FTSE 250 offers us a larger sample. So what's happened there? As a general overview, 183 (73%) of these companies now have women in their boardrooms, up from 135 last year. There has been an 8% increase in the number of companies with more than 20% of women on their boards over the past year.
The Cranfield School of Management is optimistic that UK businesses are able to deliver:
"On the assumption that FTSE 100 firms can regain the one third/two third ratio of female to male appointments, the target of 25% female FTSE 100 board directors should be met in 2015."
The Davies Report calculates that if women accounted for one third of all new FTSE 100 board appointments between 2011 and 2015, then from a starting point of 12.5% female directors, a figure of 23.5% could be achieved across the FTSE 100 companies by 2015.
The tables below show what's actually happening. FTSE 100 female appointments peaked at 44.1% in the six months to 2012. Since then (not shown in the table) the proportion has fallen to just below a third.
Where does Brussels come in?
Today Vince Cable, the Secretary of State for Business, effectively warned UK companies that if they didn't meet the 25% obligation, then Brussels would make them an offer they can't refuse.
As it stands, the European Commission plans to introduce a quota of 33% women on unitary boards by 2020. This will apply to all listed companies with a turnover of at least €50 million. According to the Cranfield School of Management, this would apply to almost 1,000 companies in the UK, well beyond the scope of the Government's initiative which is targeted at FTSE 100 companies. The EU directive would mean that these businesses would be subject to sanctions.
It has been argued that some businesses are playing the system by appointing to their boards women who already sit on several other company boards. In Norway, where a quota has already been introduced, these women with multiple directorships are sometimes referred to as "golden skirts". The concern is that businesses, by only recruiting from a select group of highly qualified women, do not work to identify emerging female talent.
As of yet, this doesn't appear to be a problem here in the UK. If we look at data from January 2013, we can see that 165 women hold 192 directorships. Furthermore, there is little difference in the number of men and women who hold multiple seats.
Flickr image courtesy of gcoldironjr2003