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Women on boards: address the director pipeline, not the quotas, says leading headhunter firm

Women on boards: address the director pipeline, not the quotas, says leading headhunter firm

Norman Broadbent Board Index says Lord Davies targets will miss deadline


Leading executive search firm Norman Broadbent today launches its quarterly board index, the Norman Broadbent Board Index&trade, which tracks changes throughout the FTSE 100, 250 and Small Cap component companies over the past year on a number of issues, including average age, time spent in roles, gender, and the number of new board members attaining their first position.

Sue O’Brien, chief executive of Norman Broadbent, said: “We consult with boards and executives regularly and wanted to demonstrate that the issue of cross functional and diverse boards is being addressed across not just the FTSE 100 but across the broader FTSE. However, it is a long term project and the Norman Broadbent Board Index&trade will provide an objective and true measure of progress to 2015. The succession below board will provide the pipeline to provide further women executive directors, in addition to the increasing number of women non –executive directors being appointed.”

Key findings:

Based on existing rates of change, the FTSE 100 will miss the Lord Davies’ 25% target for 2015 for the female composition of boards by two years. FTSE 250 companies will miss it by four years

Across all three FTSE indices, only one in 18 executive directors is female

In the FTSE 100, 26% of NED appointments in the past year were female, and 9% of executive directors In the FTSE 250 24% of new NEDs were female, and 7% of executives and in the FTSE Small Cap 17% of new NEDs were female, and 7% of executives.

The best performing sectors on gender balance at board level have been Retail, Technology & Media, and Health all male boards are prevalent within the Industrial sector.

The Norman Broadbent Board Index&trade for women on boards for Q4 is 116.4 for the FTSE 100, 118.2 for the FTSE 250 and 127.9 for the FTSE Small cap

The percentage of women on boards across the three FTSE indices has increased: FTSE 100 by 16% to 14.9% FTSE 250 by 18% to 9.4% and FTSE Small Cap by 27.9% to 9%.

The proportion of non-executive directors (NEDs) versus executive directors has increased in the past 12 months

The average time in roles and the number of NED roles held has stayed constant  over the year

The average age of executive directors and NEDs remains largely unchanged over 12 months

Krystyna Nowak, managing director of the Board Practice at Norman Broadbent, said: "While supporting having gender targets to aim for, we want to ensure that the focus for boards remains finding first class, high calibre directors. If that first class director is a woman, even better. Our role as board search consultants is to search beyond the obvious and to find those first class, high calibre women to meet our clients' requirements. But in the final decision, boards should choose the best fit for their needs at the time, with diversity taken into account, but not necessarily being a trump card."

Barry Dinan, a veteran of the board landscape who joined Norman Broadbent’s Board Practice last month after 23 years at Hanson Green, added: “There is a perceived limit to the supply of candidates. The brief for the appointment must align entirely with the board’s growth strategy, and that will provide hiring opportunities across gender, sector, and most importantly geographies. There are so many talented women at executive level that would make superb NEDs and yet we have to fight to get them on short lists. Boards need to ensure that the female they appoint is the right one, not just a gender hire or token.”

Responding to the Industrial sector’s prevalence for male directors, Neil Holmes of Norman Broadbent’s Board Practice said: “We are finding that women are appearing on shortlists, but the supply on the executive side is still lower than it should be and this requires companies to invest in long term cultural changes to ensure that in the future, women vying for executive roles have the depth and breadth of experience that is today more prevalent among their male counterparts this must be about quality derived from retention and experience, and not about tokenism.”

Norman Broadbent has tracked the progress of board composition over the past year, looking not only at FTSE 100 companies but also at FTSE 250 and FTSE Small Cap constituents.  The research shows an increase in the number of women appointed both to non-executive and executive roles across all sizes of businesses. Each quarterly index will examine different trends and the next is likely to highlight “new-to-board” appointments and the functional diversity of those appointments.

Mr Dinan added: “We need to be conscious that NEDs fulfil a vital function in safeguarding shareholders’ interests and the sustainable development of companies. While it is totally understandable and appropriate that there has been a drive to recruit more women to non-executive positions, we should not lose sight of the need for more women throughout executive and senior management roles within business such planning should be a clear element of a company’s growth strategy.”


The Norman Broadbent Board Index has been calculated from data supplied by BoardEx. Quarterly percentage movements in board composition covering a number of factors are measured against the composition of boards in January 2011, prior to the launch of Lord Davies’ review.  The changing composition of each index as a result of the London Stock Exchange’s quarterly review is also taken into account.  The data is taken from the first working day of each quarter (January, April, July and October) and compared with a base period being the composition of the FTSE 100, 250 and Small Cap boards, as of the beginning of January 2011. The data takes into account the changing composition of the FTSE 100, 250 and Small Cap as defined by the FTSE.

In Lord Davies’ report on Women on Boards early in 2011, he recommended that UK listed companies in the FTSE 100 should be aiming for a minimum of 25% female board member representation by 2015.  He further recommended that chairmen of all FTSE 350 companies should set out the percentage of women they aim to have on their boards in 2013 and 2015.


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