The percentage of board positions held by women in the top 100 companies listed with the London stock exchange FTSE has reached nearly 19 percent, the highest since the data started being analyzed in 2011, according to the latest reporting tracking that progress by Cranfield University.
The 19 percent figure is up from March of this year, when the percentage actually dipped to 17.3 percent. Only six companies have all-male boards, which means 94 percent have at least one female board director. Among the larger group of the top 250 companies, just under 15 percent of board positions are held by women, up from 13.3 percent in March. Eighty percent of those companies have at least one women on their boards.
While the pace of change has been varied, on the whole, the percentage of these positions that are held by women increased by five points since 2011, “similar in size to that which took the previous decade to achieve,” the report notes. The progress since 2011 is not necessarily a coincidence: that was the year that the Davies Report was published in the country, which while not setting a requirement did set a target of 25 percent women on FTSE 100 boards by the end of 2015. It also asked that FTSE 350 chairmen set aspirational targets on what percentage of women they want on their boards by both 2013 and 2015, recommended a change to the Corporate Governance Code that would require companies to establish policies on increasing women on their boards with objectives and disclosure of their progress, and implemented a variety of transparency measures to track increases.
After those changes, 94 of the FTSE 100 have mentioned the need for greater boardroom diversity and 65 percent have stated a clear policy on diversity, although just 42 percent have set a measurable objective and just 30 percent have adopted policies or measures aimed at increasing the number of women in senior management. While progress has been made in the U.K. on increasing the number of women serving on boards, the number of senior executive positions held by women has stayed steady at about 6 percent since 2010.
British progress on increasing gender diversity on board stands in contrast to stagnation in the United States. Women hold 16.6 percent of board seats at Fortune 500 companies, a number that has stayed basically flat for seven years. Fifty of those companies don’t have any women directors on their boards. The U.S. doesn’t have any quotas or targets for gender diversity. It does have some new rules issued by the Securities and Exchange Commission in 2010 requiring companies to disclose information about how they consider diversity when selecting their boards, but most companies fail to comply.
Other countries have gone further than both the U.S. and the U.K. to institute gender quotas on boards, with Norway taking the first step by enacting a 40 percent requirement. Spain, France, Italy, the Netherlands, and Belgium have passed similar laws, and European Union Justice Commissioner Viviane Reding has proposed a 40 percent quota for the entire region, which has been approved by two European Parliament Committees and will next be considered in a plenary session of the European Parliament in mid-2014. There is ample evidence that gender quotas work, including Norway’s example, where women now hold 35 percent of non-executive board positions and the number of senior management positions held by women increased from 15 to 18 percent.
Increasing gender diversity isn’t just good for equality; it’s good for business, according to multiple studies. One found that the stock price of companies with women on their boards outperformed those whose boards were male-only. Another found that companies on one stock index that had gender diverse boards outperformed male-only ones by 26 percent over six years. And yet another of Israeli companies found that those with at least three women directors at board meetings had significantly better returns. A study of 600 board directors showed that women make decisions that lead to better company performance.