Females add diversity to boards

The drive to get more women on to FTSE boards is leading to greater diversity of experience, with new entrants coming from a variety of backgrounds, research has revealed. Female non-executive directors are coming from investment banking, the public sector, professional services and the not-for-profit sector, as well as from companies.

They are also coming from roles in fields such as human resources and marketing, rather than traditionally male-dominated ones such as finance.

The shift is revealed in a study by the Ashton Partnership, a headhunter group, which said it was a welcome development that had been achieved without any obvious loss of quality.

It said it corrected the “misconception” that there was a limited talent pool of women for board roles. It also countered the frequently expressed view that “you can’t get on a PLC board until you have been on a PLC board”.

Women now make up 17.4 per cent of FTSE 100 and 12 per cent of FTSE 250 board positions, up by nearly half since Lord Davies’s government-appointed committee on women on boards reported 18 months ago.

The study found that only 16 per cent of female non-executives on FTSE 250 boards came via the traditional route of having been a chief executive or a chief financial officer, compared with 60 per cent of the men.

They were on average three years younger than their male counterparts when appointed to their first non-executive director role. Seventy-three per cent of women had no previous main board experience, compared with 37 per cent of men, although many women had held senior jobs below board level.

Ashton Partnership said greater diversity was also seen in the FTSE 100, which had appointed more women from the public sector and where companies valued exposure to government policy making and international trade issues.

Women appointed to FTSE 250 non-executive roles in recent months include: Demetra Pinsent at Capital & Counties Properties, a former McKinsey partner; Helen Stevenson at St Ives, previously UK chief marketing officer at Yell Group; and Jessica Burley at UK Mail, who is chief executive of M/Six, a WPP-owned media agency.

Nick Aitchison, partner leading the board practice at the Ashton Partnership, said the research “rejects the traditional misconception that there is a limited talent pool of women for NED roles. Boards are spreading the net more widely and, refreshingly, are appointing from a broader range of career backgrounds, without any obvious loss of quality.”

Incomes Data Services, the pay research group, said in a report that only a third of FTSE companies increased fees for non-executives in 2012, down from two-thirds in 2011 – possibly because of investor scrutiny over boardroom pay.

It found that FTSE 100 chairmen received rises averaging 6 per cent, taking their pay to nearly £400,000. Overall, average NED fees rose by 4 per cent to £64,300.

Remuneration committee chairmen’s fees rose by 14 per cent – ironically, caused by the increased burden of addressing shareholder concerns over executive pay. Senior independent directors got rises averaging 10 per cent, driven by extra corporate governance responsibilities.