Redressing the balance

Published: 29 April, 2015

The business benefits of women serving on the board of directors has long been well-proven. Research by Catalyst back in 2013 found that Fortune 500 companies with women on their board of directors achieved tangible business results such as: higher return on equity (on average, companies with the highest percentages of women board directors outperformed those with the least by 53 per cent); higher sales (on average, companies with the highest percentages of women board directors outperformed those with the least by 42 per cent); and higher ROI (on average, companies with the highest percentages of women board directors outperformed those with the least by 66 per cent). And as David Atkinson, head of manufacturing, commercial banking SME, Lloyds Bank, recently commented: “As manufacturing continues to play a pivotal role in aiding the growth of the British economy, the onus remains on the industry to encourage the development of skilled workers. That includes creating a more diverse workforce with a greater female representation. Offering access to inspirational female role models remains vital to achieving these objectives, helping to eliminate old stereotypes, and providing evidence of what young women can achieve by pursuing their ambitions.”

Recent news that suggests a move in the right direction is that women now account for 23 per cent of all board seats in FTSE 100 manufacturers – up from 19 per cent in 2013 and 21 per cent last year. These figures are published in a new report by EEF, the manufacturers’ organisation, sponsored by Lloyds Bank Commercial Banking. Two consecutive increases in the female share of directorships have kept Britain’s leading manufacturers in line with the wider FTSE 100 and on track to meet the minimum 25 per cent female board representation recommended by Lord Davies in his 2011 Women on Boards report.

The Women in Manufacturing report is the third annual assessment of female boardroom representation in the sector and the further efforts required to attract and retain talented women. This year its findings are particularly important as the deadline is fast-looming for all FTSE 100 companies to meet the Davies target. Over a quarter (28 per cent) of FTSE 100 manufacturing companies are at or above this target. But some companies are far ahead of the game. GlaxoSmithKline, Unilever and Diageo all have five female board members each but, Diageo, with 45 per cent or five of its 11 board members being female, leads the way. In total, women hold 64 out of 279 directorships in FTSE 100 manufacturers and, for the second year running, all these companies – 25 in total - have at least one woman on their board. At the same time, the percentage of new board appointments going to women has increased to 25 per cent (up from 19 per cent last year), a step in the right direction if FTSE 100 manufacturers are to achieve the one-third new appointments target recommended by Lord Davies.