Out-Law / Your Daily Need-To-Know

Women hold majority of FTSE 150 NED roles for first time

Out-Law News | 16 Dec 2021 | 9:27 am |

Kate Dodd tells HRNews about improving talent pipelines and the importance of sponsorship programmes

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  • Transcript

    For the first time women hold a majority of non-executive board roles. However, men still men still dominate senior board positions, holding most of the executive director positions. 

    The 2021 UK Spencer Stuart Board Index is the latest review of governance practice in the FTSE 150, and it shows that women now represent 51% of all non-executive directors, up from 18% a decade ago. But the data also shows the majority of executive directors, 86%, were male, with men holding all four senior board positions in 64 of the top 150 companies. There has been no increase of women holding executive director positions over the last year. 

    People Management reports on this highlighting the progress made with ethnic diversity among FTSE boards – in the last year, the number of appointments of directors with a minority ethnic background increased by more than 40%. Back in 2017, the Parker Review called for FTSE 100 firms to have at least one director from a minority ethnic background on their boards by December 2021. However, the data shows that whilst 61% of FTSE 150 firms had at least one minority ethnic director sitting on their board, 39% - the equivalent of 59 companies - had no minority ethnic representation at all. Commenting on the data, Sandra Kerr, race equality director at Business in the Community, told People Management that the results are a sign of progress, but it’s slow. She puts that down to the fact that mentorship and sponsorship opportunities have declined since 2018, a point we will come back to. 

    Personnel Today also reports on this. Their headline is ‘Progress made on ethnic and gender balance on FTSE boards, but the article also looks at why that progress is slow. They quote Tessa Bamford, who leads Spencer Stuart’s board and CEO practice. Commenting on the lack of female directors in senior board positions she says: ‘companies must continue to focus their efforts on developing the pipeline of female talent within the executive ranks and to have more women with P&L experience.’

    Those comments on what companies should be doing make a lot of sense. Mentorship and sponsorship programmes have been shown to work in practice, helping improve diversity within a business, so let’s hear more about that. Kate Dodd is a diversity and inclusion specialist helping clients on their D&I journey and I asked her about her approach to both ethnic and female representation: 

    Kate Dodd: “So the challenges are different. So, we've been talking a lot recently around ensuring that you've got sufficient representation from minority ethnic groups and often the challenge there is that people say, look, we don't have the pipeline, we don't have sufficient numbers of ethnic minority talent within our business in order to bring them. There are, of course, some businesses that are hugely male dominated, but the pipeline issue tends to be less of an issue for lots of businesses, they do have the female talent, they're just not making it up to those very senior positions. So, the challenges are different. The challenges have also been exacerbated hugely, by the COVID pandemic. We have seen a real disparity, particularly around childcare responsibilities, the lack of school during those lockdown periods, but also the lack of extended informal childcare, as well as formal things like after school club, breakfast club, etcetera which has really impacted on women and is definitely holding back their careers. So, those challenges are there, and they are real and, of course, not just for women with children, but for many women within organisations.”

    Joe Glavina: “Tell me about sponsorship of women, Kate, because I know you’ve got strong views on that.”

    Kate Dodd: “Yes, absolutely. Sponsorship is one of the key things, I think, and if you have to do one thing, I would say look at sponsorship. Sponsorship has to exist within a business and the reason it has to exist is that's how promotions have always happened, and they probably always will. It’s only by having a formal sponsorship programme, where you break down the informal sponsorships that are already going on. So you know, sometimes you wonder, gosh, I just wasn't in the right place at the right time, or I didn't know about that vacancy, or I wasn't around to get that opportunity, and the reason for that, of course, is that there isn't somebody there thinking about you, notifying you, giving you a tap on the shoulder and letting you know and the people who are getting notice of those positions are being informally sponsored, i.e. somebody is taking them under their wing and is helping them and bringing them up the ladder, as it were. The only way really to break down that informal sponsorship is to introduce formal sponsorship into your organisation so that people have that as part of their role, to bring on, to mentor. But sponsorship goes beyond mentoring, of course. Mentoring is sharing of thoughts and sharing of opportunities whereas sponsorship is actually having it as part of your job to bring on that person and help them to navigate their own career and coming up through the ranks of a business.”

    Joe Glavina: “The Parker Review, which was concerned ethnic diversity of UK boards, talks about the sponsors being the likes of the CEOs – so very senior people. Do you agree there is a role for CEOs here?”

    Kate Dodd: “Yes, I think it's important that the CEOs are involved in sponsorship, I don't think they should just be the CEOs, I think everyone on the board has got a role to play and, you know, reciprocal mentoring, again, is a really valuable thing and you do need your most senior people involved in this because if you're relying on the next level down or those people who report into the Exec board but aren't sitting on it, or aren’t sitting on the PLC board, then you're not actually getting effective sponsorship because those people are not the ultimate decision makers. So, I do agree that sponsorship has to be a really key part and it should be written into the job descriptions of those people who are in those most senior positions.”

    The 2021 UK Spencer Stuart Board Index is a comprehensive review of board composition and governance practice in the largest 150 companies in the FTSE rankings, providing a helpful perspective on the health of boardrooms over the course of the last year. We have put a link to it in the transcript of this programme. 

    LINKS
    - Link to 2021 UK Spencer Board Index