Significant increase in female NED appointments
There are more female non-executives in the FTSE 350 than ever before
The proportion of female first-time FTSE 350 non-executive directors (NEDs) significantly increased last year, according to a report by Korn Ferry.
The firm’s Class of 2014 report, which analysed all first-time NED appointments to FTSE 350 companies, revealed that 39% of first-time NEDs in 2014 were women, up from 28% in 2013 and 11% in 2007.
The proportion of female appointees from general management and finance grew significantly, with 52 women from these backgrounds achieving first-time appointments in 2014 compared to just five in 2013.
The report suggests this might reflect a widening pool of female general managers and finance experts, and could indicate greater gender diversity in the executive pipeline. This may result, according to the report, in a future increase in the number of women holding executive board positions as chief executives and finance directors.
However, Helen Pitcher, chairman of Advanced Boardroom Excellence, warned that the results do not necessarily indicate that more women are in the talent pipeline.
“I do not believe the executive pipeline is being strengthened at all,” she told HR magazine. “I believe that chairmen are taking more risks, appointing more female NED first-timers, but from an existing pool of FDs and GMs predominantly from other organisations and not from a healthy executive pipeline.”
Lord Davies set a target for 25% of all FTSE 100 directors to be female by 2015. This target was reached in July.
“The focus should now be on the executive pool,” said Pitcher. “The recent focus of appointing more female NEDs has been a success; the 25% goal has been reached on time for the FTSE 100 companies. If we do not focus on the executive pipeline with equal attention and energy, the future will not be bright. We will not have more women in the pipeline, just women sitting on multiple boards.”
Richard Emerton, managing partner and head of EMEA board and CEO practice at Korn Ferry, pointed to another medium-term trend of a steady increase in appointments of people with no past listed company executive board experience.
“This is evidence that boards are casting the net wider and looking for new blood, but it also puts pressure on chairmen to ensure that these ‘inexperienced’ appointees are thoroughly inducted and carefully mentored as they learn the craft of public company directorship,” he said.
“Though there are many positive signs evidenced by this report, there is still progress to be made to ensure a breadth of experience and viewpoints,” he added. “Of course, neither boards nor individuals want a situation where appointments are made on the basis of tokenism, so much of the challenge lies in identifying, supporting and developing the talent pipeline so that company leaders rise from a truly diverse talent pool.”
Ann Pickering, HR director for O2, told HR magazine that it is vital that these successes are seen as the starting point, rather than the finishing line. "The reality is that we don’t just want more women as non-executive directors; we want them filling more director roles too," she said.
"If we are to achieve real and long-lasting workplace diversity, employers must see the value of nurturing the potential of women at every level, regardless of the size of the business, therefore creating a strong pipeline of female talent all the way up to the boardroom,” she added.