November 24, 2015 – The number of women serving as directors in the top FTSE 150 companies continues to expand, according to the just-released Spencer Stuart 2015 U.K. Board Index. The survey found that 23 percent of all directors in the FTSE 150 are women, compared with 20.6 percent in 2014; 28.4 percent of FTSE 150 non-executive directors are women, verses 25.9 percent in the year earlier period.
Female representation on boards of U.S. companies, by comparison, has also been gaining momentum — yet at a much slower pace.
According to Spencer Stuart’s U.S. Board Index 2015, women joined S&P 500 boards in greater numbers. Female representation among new directors rose to 31 percent in 2015, from 30 percent in 2014 and 21 percent in 2010. But only seven new female directors joined S&P 500 boards this year. One bit of good news: just 13 S&P 500 boards reported having no female directors in 2015, a stunning decline from 2010 when 50 boards, or 10 percent of the S&P 500, had no female directors at all.
Recruiting rival Korn Ferry has also reported evidence that women are making strong gains in the most sought-after top-slotted roles in global companies. According to one of its surveys, more women in the U.K. have joined the boards of FTSE 350 companies as new non-executive directors. Thirty-nine percent of first-time FTSE 350 non-executive appointees were women last year, reports Korn Ferry, up from 28 percent in 2013 and 11 percent in 2007.
A separate report, The 2020 Women on Boards’ 2015 Gender Diversity Index (GDI), reports that women continue to make gains in the boardrooms of the Fortune 1000. Among these companies, women held 17.9 percent of the board seats in the 2015, compared with 16.9 percent in 2014.
“Our current research consistently shows that companies with gender diversity on their boards are more sustainable,” said Malli Gero, president and co-founder, 2020 Women on Boards.
The drive for more female board members is a growing global phenomenon and many studies now show that progress is being made.
Korn Ferry’s Market Cap100 (KFMC100) study found that 20 percent of new directors were women. The study examined board practices at the largest U.S. companies by market capitalization. Of these new directors, just nine percent were African American, three percent were Asian American and zero percent were Hispanic Americans.
“Clearly, great strides are being made in female board representation,” said Scott A. Scanlon, CEO of Hunt Scanlon Media in Greenwich, Conn. “But achieving diversity among this group seems to be increasingly elusive.”
Recent research released by Heidrick & Struggles has also indicated that progress for women in boardrooms within the Fortune 500 is accelerating. Of the 339 new directors appointed in Fortune 500 boardrooms last year, 99 were women, representing 29.2 percent of the total. That compares with 25.9 percent in 2013 and 22.8 percent in 2012.
The Heidrick & Struggles Board Monitor projects that women will account for 50 percent of new board directors in the Fortune 500 in the U.S. for the first time in 2024 — nine years from now.
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Search firms of every size are finding that recruiting board directors can be financially rewarding. According to Equilar, the median pay of directors was $233,600 in 2014, up about 17 percent since 2010. For recruiters, that means a hefty fee of around $75,000 for each director brought onto a board.
But director recruiting is becoming more challenging. According to Egon Zehnder, the heightened expectations now placed on boards have elevated both the professional standards and personal commitment required of all directors.
At the same time, many boards find that the supply of independent-minded ‘board experienced’ directors – especially those who can add vital forms of specialized skills and expertise – is limited, as such candidates are both widely sought after and sometimes hesitant to take on the intensive responsibilities of board service.
Aside from the fees, recruiting directors is also good for building a search firm’s reputation and brand among C-suite executives. U.K.-based MWM Consulting has developed a particular reputation in appointing women to boards, frequently helping them secure their first non-executive role. The firm has supported the appointments of over 20 percent of the women currently sitting on FTSE 50 boards and of 15 percent of women in the FTSE 100. In 2009, MWM launched its Women for Boards initiative, aimed at helping rising female talent to secure board directorships on FTSE 350 companies.
All of this has helped translate a message of authority to a growing cadre of clients at the chief executive level. MWM Consulting is now recognized as the ‘top chief executive recruiting brand’ among all of its direct competitors in London, according to a poll conducted by Hunt Scanlon Media due out this spring.
Contributed by Scott A. Scanlon, Editor-in-Chief, Hunt Scanlon Media