Board_Room300

An all white, all male, boardroom of old

The blossoming diversity of Britain’s boardrooms may begin to wilt over the next 18 months as the terms of current female non-executive directors (NEDs) start to expire, according to new analysis released by Audeliss, a diversity focused executive search firm. Lord Davies of Abersoch is expected to release the latest update to his report on workplace diversity on Thursday and, it is reported, will reveal that FTSE-100 firms have failed to reach a target that 25 percent of executive director positions go to women. It is also expected that he will raise the target to 30 percent in the long term.

The latest research shows that the number of female NEDs in the FTSE 100 currently stands at 31.3 percent of the total number of top executives. But this is expected to fall to 25.6 percent 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 the very worst case scenario this could fall to as low as 17 percent, the report found.

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

Audeliss CEO, Suki Sandhu, said of the reports findings: “The data suggests that today’s female NEDs only average a five tenure, which means that we are fast approaching a period when many of the current leaders will stand down. The question we have to ask 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 and talented candidates. Research has also proven that companies perform better when they have at least one female executive on the board.

“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,” Audeliss concluded.