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Boardroom diversity risks slipping into reverse if spotlight dims

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28th October 2015

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The diversity of Britain’s boardrooms risks going into reverse gear over the next 18 months, as the terms of current female Non Executive Directors (NEDs) expire, according to new analysis Audeliss is releasing today on the eve of the final Lord Davies report, which is due out on Thursday.

The latest research shows that the number of female NEDs in the FTSE 100 currently stands at 31.3% of the total. But our analysis shows that female NEDs only average 5.5 years tenure, which means that we are fast approaching a period when many of the current leaders will stand down.

This means that the number of female NEDs will fall to 25.6% by April 2017 if current NEDs follow existing trends and are not renewed in post or stand down due to expiry of their terms. In a worst case scenario this could fall as low as 17%. A similar picture is found when analysing the wider group of 350 FTSE indexed companies.

The situation is compounded by the slim pipeline of female executive talent emerging to replace the current generation of boardroom leaders. The Audeliss analysis reveals that the number of female executive leaders is worryingly low. In the FTSE 100, it stands at 9%. For the FTSE 250, the percentage is 5% and in the FTSE 350 it is 7%.

Our CEO, Suki Sandhu, said, “The data suggests that today’s female NEDs only average 5.5 years tenure, which means that we are fast approaching a period when many of the current leaders will stand down. The question now is ‘who will replace them?’. The female executive pipeline of talent is simply too slim to sustain the progress of the last five years.”

Huge strides have been made to improve boardroom diversity in the past few years. This is a result of government pressure, corporate action, pressure group activity and efforts from executive search firms in sourcing diverse talented candidates. Research has also proven that companies perform better when they have at least one female executive on the board.

But there is no room for complacency, as Sandhu explains, “As the Government spotlight from Lord Davies dims, there is a very real danger that companies could go into reverse gear in terms of their boardroom diversity. Ongoing pressure is needed to sustain and improve on today’s position. “We need companies to focus on nurturing the next generation of female talent with executive leadership programmes and by allowing more flexible working arrangements and other family-friendly policies.”

Helena Morrissey CBE, Founder, 30% Club commented, “I welcome this insightful research by Audeliss – it’s so important that the improvement in women on boards seen over the past five years is sustained, and this new data is a timely reminder of the need to  keep up the momentum and source more talented women who can serve on boards.”

If you’d like to learn more about our analysis, get in touch via info@audeliss.com

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2 Responses to “Boardroom diversity risks slipping into reverse if spotlight dims”

  1. I’m amazed, I must say. Rarely do I encounter a blog that’s both educative and engaging, and without a doubt, you have hit the nail on the head. The problem is an issue that too few men and women are speaking intelligently about. Now i’m very happy I came across this in my search for something relating to this.

    • Audeliss says:

      Thank you. Please keep reading for updates from the equality and corporate inclusion practice at Audeliss.

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