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FTSE 100 BOARDS GET SILVER; WOMEN OLYMPIANS TAKE GOLD

FTSE 100 BOARDS GET SILVER WOMEN OLYMPIANS TAKE GOLD

More female Non-Executive Directors were appointed to FTSE 100 boards than men for the first time last quarter, but the overall numbers still falls short of the gold medal tally set by Team GB’s female Olympians

LONDON: 28 August 2012 – Leading executive search firm, Norman Broadbent, today issues its quarterly board index, the Norman Broadbent Board Index&trade, which shows that women accounted for 56% of NED appointments in the most recent quarter, taking the FTSE 100 total of women on boards to 16.7%. By contrast, the performance of our GB heroines, who secured 38% of the gold medal tally at the recent London Olympic Games, shows that there is still some way to go before women are making a similar impact on board numbers.

Women now account for one in five non-executive roles on FTSE 100 Boards. By contrast, the index also highlights that for the third quarter running no women were appointed as executive directors of FTSE 100 companies, and, for the first time, no women were appointed as executive directors of FTSE 250 companies in the past quarter.

“With executive changes happening relatively infrequently, it is no surprise that boards have responded to Lord Davies 25% target by appointing more women as Non-Executive Directors and great progress has been seen, especially during the last quarter,” said Neil Holmes, a director of Norman Broadbent’s Board Practice. “However, the dearth of females being appointed to executive positions is a cause for worry and highlights the lack of women holding senior positions throughout organisations.”

The index warns that the proportion of all executive directors on boards is decreasing. Sue O’Brien, chief executive of Norman Broadbent said: “While cost containment is an understandable response to the current environment, shrinking executive numbers must be a concern. We need to encourage greater breadth and diversity of functional experience on PLC boards to enable companies to respond more effectively in today’s fast moving international markets. Our attention should be turned to the pipeline of executive talent.”

However, it is worth noting that since the Index began (in January 2011) the number of new Non-Executive Directors (NEDs), those taking on their first PLC non-executive role, has remained steady, at approximately 35% of all non-executive appointments. “We welcome the foresightedness of boards appointing individuals who have not previously been a Non-Executive Director, as this can bring greater diversity of experience to boards.” said Krystyna Nowak, a director of Norman Broadbent’s Board Practice. “Although new non executives often benefit from more initial mentoring by experienced chairmen to ensure that they make a successful transition from executive to non-executive involvement, it is encouraging to see that chairmen are investing in the development of a new breed of non-executive”.

Key findings:

For the first time, more women than men were appointed to the Boards of FTSE 100 companies in the last quarter, accounting for 56% of Non-Executive Director appointments

For the third quarter running, no women were appointed as executive directors of FTSE 100 companies

42% of NEDs appointed to FTSE 250 companies were women in the past quarter

For the first time, no women were appointed as executive directors of FTSE 250 companies this quarter

17% of NEDs and 20% of executive appointments to small-cap PLCs were women

30% increase in women on the boards of FTSE 100 companies since January 2011

Women now account for 16.7% of all Directors in the FTSE100

Account for one-in-five NED roles

Only 6.5% of FTSE 100 executive directors are women

38% increase in women on the boards of FTSE 250 companies

10.9% of FTSE 250 directors are women

Only 4.5% of FTSE 250 executive directors are women

42% increase in the number of women on small cap PLC boards

10% of all directors on small cap boards are women

6.1% of executive directors in small cap companies are women

The number of executive directors as a proportion of total board members continues to shrink across all indices, with the proportion of executive directors down approximately 5% since January 2011

In Q2 35% of NEDs appointed are taking on their first PLC non-executive role

 

 

 

 

 

The Norman Broadbent Board Index&trade

2012 Q2 Index

 

FTSE 100

FTSE 250

Small Cap

 

Executive v Non Executive Board Balance

Execs

94.28

94.85

94.04

 

NED

102.43

102.39

102.38

 

 

 

Gender

Women

130.57

137.56

141.69

 

Men

95.51

96.77

96.82

 

 

 

% of Women on boards

Exec

6.49%

4.47%

6.11%

 

NED

20.71%

13.68%

11.47%

 

 

 

Women as a % of total board members

Exec NED

16.71%

10.91%

10.03%

 

 

 

Average age of Board

Exec

100.59

100.30

100.07

 

NED

99.49

99.74

99.94

 

 

 

Time in Role

Exec

100.20

95.26

104.57

 

NED

99.77

106.58

95.47

 

Norman Broadbent Board Index&trade started from a base of 100 taken from Boardex as of first working day of January 2011

Q2 2012 data released in July 2012.

 

Methodology and background

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. Norman Broadbent are also keen advocates of the Women’s Business Council set up to look at ways of maximising women’s contribution to economic growth.The council will assess priorities in challenging the barriers that women face in playing a full part in business and the workplace.

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