women and equal pay
the latest annual report highlighting the progress made since his recommendations were first set out in 2011. Encouragingly, the review confirmed that employers were stepping up and implementing the change needed to reach the target of 25% female representation on corporate boards. It stated that as of 1 March 2013, women accounted for 17.3% of FTSE 100 and 13.2% of FTSE 250 board directors, which was up from 12.5% and 7.8% respectively in February 2011.
More recent and compelling figures have come out since this annual report, which have shown that even greater progress has been made to improve female representation in UK boardrooms. Boardwatch (
www.boardsforum.co.uk), a website that tracks the appointment of women directors to FTSE 100 and FTSE 250 boards, confirmed that as of November 2013, women accounted for 19% of FTSE 100 board directors and 15.1% of FTSE 250 board directors. It also revealed the following: l For FTSE 100 companies: m 19.0% women directors (up from 12.5%*); 23.9% women non-executive directors (up from 15.6%*); 6.0% women executive directors (up from 5.5%*) m five all-male boards (down from 21*) m 24% of board appointments since 1 March 2013 have been women; 27% of new non-executive directors are women; 13% of new executive directors are women m 66 more board seats held by women needed to reach Lord Davies 25% target.
l For FTSE 250 companies: m 15.1% women directors (up from 7.8%*); 19.0% women non-executive directors; 5.5% women executive directors m 47 (18.8%) all-male boards (down from 52.4%*) m 34% of board appointments since 1 March 2013 have been women; 37% of new non-executive directors are women; 20% of new executive directors are women. (*Lord Davies’ Women on Boards,
February 2011. Figures relate to 2010.) As can be seen here, there has been an obvious progression in the figures over the last two years. In his review, Lord Davies acknowledged not only the efforts made by employers but applauded
...OF BRITAIN’S TOP 100 PRIVATE COMPANIES, ONLY 64 PUBLISHED THE COMPOSITION OF THEIR BOARDS...
the dedication demonstrated by other sectors of government as the main drivers of success. Not only has the Business Secretary Vince Cable fully backed this campaign, other Ministers such as Theresa May, Maria Miller and Jo Swinson as well as the Prime Minister himself, have specifically written on this issue and communicated with businesses and stakeholders about the need for action. Furthermore, the Financial Reporting Council has amended the UK Corporate Governance Code making it a requirement for employers to report on their diversity policies. In addition, a voluntary code of conduct for executive search firms is now in place. This code marries the efforts of both businesses and the executive search industry to indentify and recruit the best female talent.
Having said this, Lord Davies emphasised that even though the progress so far has been very positive, employers need to remind themselves to continue to work towards their goals. He commented: “These figures are a sign that we have come a long way since our original report in 2011. The target of 25% in the FTSE 100 by 2015 was rightly ambitious but the increase in the figures is a sign that businesses are not letting the issue pass them by. However, this is no time to get complacent and think that the job is nearly done. We have still got a long way to go but at least these numbers are moving in the right direction after stalling earlier in the year.”
Winning half the battle
It appears that even with such promising statistics, women are winning only half the battle. Recent figures released by the Office for National Statistics have shown that the pay gap between male and female full-time employees has risen by half a percentage point, now standing at 10.0% in April 2013 (according to the Annual Survey of Hours and Earnings UK 2013, which was published on 12 December 2013). This may appear counterintuitive when considering the concerted efforts that have been made to improve gender diversity in the boardrooms of FTSE 100
and FTSE 250 companies. However, Nicola McMahon, Associate at Charles Russell LLP, makes an important point when she highlights that the figures correspond to a high proportion of female board members who are performing non-executive roles. She elaborated: “In fact, only 6.1% of FTSE 100 executive directors and only 5.4% of FTSE 250 executive directors are women, indicating that women have been brought onto boards in non-executive advisory roles, rather than in executive positions where they are leading the companies themselves.” Furthermore, Nicola cited research conducted for the Observer newspaper last year by analysts BoardEx, which is less optimistic than those already mentioned. This study revealed that out of Britain’s top 100 private companies, only 64 published the composition of their boards and that, of those, 73% have no female executive directors. She continued: “These figures may be a useful indicator of why, despite the apparent improvement of representation at board level, the gender pay gap has recently widened. Women are clearly still not being recruited into the most senior and highly remunerated corporate roles on an equivalent basis to their male counterparts, which will have a sizeable impact on gender pay equality.” Despite this reality check, it can be argued that Lord Davies’ recommendations have been instrumental in boosting the number of women who are taking up board-level positions over the last few years. It can also be said however, that there is still a long way to go before this trend begins to influence a significant change within the pay equality landscape. Nicola concluded: “That is not to say that efforts to improve boardroom diversity should be abandoned. The Davies Report recommendations will continue to be implemented in an attempt to address some of the inequalities which are apparent in the workforce as they are not designed to tackle pay inequality between men and women. However, the gender pay gap will only improve if women are retained at all levels and paid at an equivalent rate to their male counterparts.”
PP
PayrollProfessional 29
HR and employment information HR focus
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