Cabinet Office
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Progress for women not fast enough more than forty years before equality on FTSE boards
Deputy Minister for Women Barbara Follett today called on FTSE companies to appoint more women to their boards, highlighting the increased profitability which can result.
New figures show that only 12% of FTSE board directors are female1. This is up one percentage point from last year, and up five points from 2002. At this rate it will be about 2050 before there are equal numbers of men and women on company boards. One in four FTSE boards have no women on them at all4.
Evidence shows that companies with a female chief executive or board director achieve a 10% higher return on capital. In the United States, companies with the highest percentages of women board directors achieved a 53 percent higher return on equity than those companies with the lowest representation2.
The critical mass, or 'tipping point', has been identified as having three or more women on a company's board3. Women are no longer seen as outsiders and are able to influence board discussions and decisions, with benefits both for the company's efficiency and introducing new family friendly policies. But last year, only 11 of the FTSE 100 companies had three or more women on their board4.
Speaking at the Institute of Directors 'Women as Leaders' conference, Ms Follett said:
"We have made progress. But not fast enough, and many British boardrooms are still no-go areas for women. Women are significant consumers and this should be reflected on boards. The business case for this is clear; more women can drive up efficiency, innovation, and profitability.
"But businesses need to become more family friendly and flexible, so men and women can choose how to balance work and family life, and enable women to reach their potential at work.
"Three is the tipping point to accelerate progress; so I challenge businesses to increase the number of women on their boards to at least this."
Professor Susan Vinnicombe OBE, Director of the International Centre for Women Leaders at Cranfield School of Management said:
"Although the increase is disappointing this year, there are some encouraging underlying shifts in the pipeline which we are examining in this year's report. "
What the Government has done since 1997 to help women progress in the workplace:
* Introduced the right to request flexible working arrangements for over 6 million employees (3.6m parents with young and disabled children and 2.65 m carers of adults);
* More than doubled the number of good quality affordable childcare places and introduced free early education for 3 and 4 year olds;
* Helped increase the quality of part-time work by investing in the Quality Part Time Work initiative;
* Signed up over a 100 employers from both the private and public sectors to an exemplar employer programme covering a wide range of best practice on gender equality;
* Helps fund the annual Female FTSE report which provides a regular measure of the number of women on the boards of the UK's top 100 companies;
* The Government supported the setting up of the FTSE 100 Cross-Company Mentoring Scheme. Currently 30 FTSE-100 chairmen and chief executives are mentoring 33 women identified as having the potential to reach the boardroom.
What the govt is doing to help women stay in and progress in the workplace:
* Extending the right to request flexible working to all parents with dependent children under 16 years of age.
* Extending Statutory Maternity Pay from 39 weeks to 52 weeks.
* Giving a new right to fathers to take up to 26 weeks Additional Paternity Leave before their child's first birthday, to allow mothers to return to work early should they wish to.
* Extending positive action so employers can take steps to address under-representation of, for example, women or people from minority ethnic groups.
In June, the Minister for Women Harriet Harman outlined a range of measures in the Equality Bill which will increase transparency in public and private sector organisations, including:
* Banning 'secrecy clauses' so that work colleagues can compare wages and challenge employers who unlawfully pay them less. Nearly a quarter5 of employers ban their staff talking about their wages, with women more likely to be in the dark about colleagues' pay than men.
* Public authorities will have a duty to report on important inequalities like gender pay, disability employment and ethnic minority employment.
* £160billion is spent every year by the public sector on British businesses - Government will look at how public procurement can be used to deliver transparency and change.
* The Equality and Human Rights Commission will conduct a series of inquiries in sectors where there is clear inequality, for example the gender pay gap in financial services is 41.5% compared with the national figure of 12.6%.
* Businesses will be challenged through the development of an equality "kite-mark" to report on the gender pay gap in their organisation and their employment of disabled and ethnic minority staff.
The full 2008 Female FTSE report from Cranfield School of Management will be published on 20th November 2008.
Media enquiries
Please contact the Government Equalities Office press office on 0207 276 0932 / 0996
Notes for editors
* The Government Equalities Office is responsible for the Government's overall strategy, legislation and priorities on equality issues. It was established in July 2007. The Office also has direct responsibility for policy on gender equality, sexual orientation, and for integrating work on race.
* Cranfield School of Management is one of Europe's leading university management schools renowned for its strong links with industry and business. It is committed to providing practical management solutions through a range of activities including postgraduate degree programmes, management development, research and consultancy. http://www.som.cranfield.ac.uk
1 2008 Female FTSE report by Cranfield School of Management
2 The Bottom Line: Corporate Performance and Women's Representation on Boards: Oct 2007
3 http://www.wcwonline.org/?option=com_content&task=view&id=585&Itemid=198
4 2007 Female FTSE research by Cranfield School of Management
5 According to the former Equal Opportunities Commission in 2004.
