British FTSE boards remain pale, male and stale and are not likely to change any time soon. They are much whiter than the British population, and increasing in age with little diversity in education and career background, according to a new study released today.
Female executive directors have only risen from 1% to 3% since 1996, when comparative research was carried out, and a quarter of all directors are still educated at Oxford, Cambridge or Harvard. Young blood is also missing from FTSE 100 boardrooms with the average age at 58.5 years compared to 56 in the original 1996 report.
The research, from Governance Institute ICSA, London Business School’s Leadership Institute and Elisabeth Marx Associates, comes out as boards are under more scrutiny than ever to be diverse.
“Given the rapidly changing expectations of organizations and their boards, diversity of thoughts and experience are an even more crucial component of board effectiveness than ever before and getting the right people around the boardroom table is a priority in all organizations in all sectors,” said Sara Drake, ICSA chief executive.
Some progress has been made with 28% of overall board directors now women compared to just over 4 % in 1996 but most of these are non-executives.
Peter Swabey, ICSA policy and research director suggests the narrow focus on getting women into non-executive roles has inhibited the progression of women into executive positions.
A narrow focus is also revealed in the mix of directors’ backgrounds with nearly half coming from an accountancy or finance background. Elisabeth Marx at leadership consultancy Elisabeth Marx Associates says there is a risk that nomination committees might be recruiting in their own image. Marx, who carried out the 1996 research, A View at the Top, which looked at FTSE board diversity, says a much broader definition of diversity is needed rather than a piecemeal approach.
The most admired companies back in 1996 and today have more females, more executive directors with boards less finance focused. Yet the report shows a concerning lack of change in the C-Suite, its authors say.
Boardrooms still have a long way to go. “Alarmingly, in some ways the boardroom is becoming significantly less diverse, such as the increase in the percentage of directors with a background in finance and a growing lack of international experience, which could potentially narrow the focus in British boardrooms,” said Professor Randall S Peterson, Academic Director, London Business School Leadership Institute.
