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Deloitte report reveals increase in female non-executive directors, but more women executives still needed on boards

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A report by Deloitte found major UK employers are planning to recruit board members from a more diverse range of backgrounds than has typically been the case.

At the Helm, a survey of company secretaries, shareholders and individual non-executive directors, highlights that businesses are factoring diversity into their recruitment policies, with some companies giving specific diversity instructions to recruitment consultants.

The survey indicates that over three quarters of companies are actively trying to increase the diversity of the board. But company secretary and non-executive director respondents were clear that although a board is likely to be more effective if it is has a good balance of skills, background and diversity of personal experience, specific issues of gender, age and nationality are less important.

Carol Arrowsmith, partner in the executive compensation team at Deloitte, said: "It is extremely encouraging that since Lord Davies published his report on women on boards, almost a third of non-executive appointments in FTSE 350 companies have been women. However, we also need to look hard at the number of female executive appointments. This is where many of the non-executive directors of the future are likely to emerge from and we are still seeing only one in 10 recent executive director appointments filled by a woman. This is an improvement on the overall number of executive positions held by women, which stands at  one in every 20, but it is not enough.

"Companies are right to focus on getting an appropriate balance of directors in terms of skills and experience, and this should be the main priority of any company. Businesses are starting to recruit from more diverse backgrounds and we believe this is a very positive move which will be welcomed by shareholders. Our survey suggests that shareholders are focused on board diversity with over three quarters intending to increase the level of engagement with companies on this issue over the coming year."

The report found shareholders responding to the survey believe that better succession planning would improve board effectiveness whereas the majority of company secretaries and non-executive directors do not.

Arrowsmith added: "We believe long term succession planning is of critical importance, not only from a board diversity and effectiveness perspective but also as a way of avoiding the general pay ratcheting that making appointments from outside, often on higher remuneration packages than outgoing incumbents, can create."