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Fewer than one in 10 board members are women, says Deloitte

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Women now make up 9% of all board members in FTSE 350 companies, according to the Board Structure and non-executive Directors’ Fees report from Deloitte, published this morning.

At the time the data for the report was compiled, 13% of board members in FTSE 100 companies were female and 7% in FTSE 250 companies, the majority holding non-executive positions.

Just 5% of executive board members are female, compared with 12% non-executive and almost half of all FTSE 350 companies have no female board members. This varies quite significantly by company size: 20% of FTSE 100 companies have no female representation on the board, compared with 55% of FTSE 250 companies.

Carol Arrowsmith, partner in the remuneration team at Deloitte, said: "The number of companies where there are no female board members is quite shocking. It is of particular concern that the proportion of women on boards has only increased from 5% to 9% in 10 years. At this rate, it would take 30 years to reach the position of 30% female board representation, which is the aim of the 30% Club.

"There is a wealth of research which demonstrates companies with women in senior positions perform better. Where organisations invest in the development of women, the results can be both profound and dramatic. The 30% Club aims to motivate and support chairmen to promote more women to their board. This is not about political correctness, but improving board effectiveness and business performance."

"While we would have liked to have seen more significant change over the past 10 years, this response is very encouraging and hopefully signals this initiative is going to have a significant impact.

"Many non-executive directors recruited to the boards of large companies are, or have been, executive directors in other companies. It is vitally important that we focus on the pipeline below board level and ensure that women have the knowledge, contacts and experience necessary to move into senior executive and board level positions. We also need to acknowledge that women who have the capability to take non-executive positions may need specific support to build knowledge and understanding of board dynamics and the challenges they may face as women when moving into a board position.

"Our research suggests although the number of board and committee meetings tends not to change from year to year, the amount of time spent preparing for them has substantially increased. Our discussions with non-executive directors suggest the time they commit to a given role has increased in the region of 30% to 50%."

"This has two potential consequences. Firstly, many non-executive directors do not feel fee levels have kept pace with the increased time requirement. Second, non-executive directors are likely to take on fewer roles, forcing companies to look to a wider pool of talent. Our discussions with non-executive directors suggest fee levels are an area companies may need to address. Almost half of those responding to a recent survey consider this issue could prevent them accepting a position."

Typically, non-executive fees are not reviewed every year, but in many companies, fee reviews have been further postponed. An analysis of fee levels confirms more than three quarters of non-executive directors received no increase in 2009 and over half received no increase in 2010. In 2011, more than half the non-executive directors in FTSE 350 companies have received, or will receive, a fee increase, with a median of 3%. However, fee increases in FTSE 100 companies overall have increased by only around 2% in the last three years and by around 7% in FTSE 250 companies.

Deloitte's report on board structure and non-executive fees was published earlier this month, providing detailed analysis of the structure of boards and the fees paid to non-executive chairmen, deputy chairmen and non-executive directors in FTSE 350 companies.

The report is based on information from the latest report and accounts of companies the FTSE 350 as at 1 July 2011, excluding 49 investment trusts. The data is taken from reports published before this date which includes companies with financial year ends up to and including 28 February 2011. A total of 299 companies are included in the analysis.