Top executive teams becoming more diverse
20 Nov 2020
FTSE 100 boards are becoming more diverse, taking on directors from a wider range of backgrounds and experience, but there is still a way to go until they are fully representational of all sections of society, according to two research reports
20 Nov 2020
Analysis from New Street Consulting found 79% of board directors of FTSE 100 companies come from educational backgrounds outside of the global top 30 universities, such as Oxford, Cambridge and MIT.
The research also shows that only 10% of current FTSE 100 CEOs attended Oxford or Cambridge, down from 23% in 2010.
Universities outside the global top 30 that were most frequently attended by FTSE 100 board members include the universities of Manchester (23 directors), Sheffield (11) and Bristol (11).
Tameside College, Preston Polytechnic and Belfast Metropolitan College are also now represented in the FTSE 100 boardroom, indicating the educational background of the leaders of the UK’s largest companies is wider than ever before, the workplace consulting group said.
However, the research also shows that only a minority of board directors now hold either an MBA or accountancy qualification, the other traditional stepping stones to board membership of a blue chip company. A quarter (25%) of directors have an accountancy qualification while 22% have an MBA.
One third of FTSE 100 directors are now women, up significantly from just 13% a decade ago.
Gender diversity is improving most quickly among the youngest board members, with women now representing 43% of board directors under the age of 50. If progress continues to be made at this rate, a gender balance of 50-50 on FTSE 100 boards should be achievable in the next few years.
However, research commissioned by the Financial Reporting Council (FRC) found that while LGBTQ+ people have made a significant contribution within the business community, the barriers to their progression and extent of discrimination have often been stark.
The report found that too often corporate culture has not been a welcoming environment for LGBTQ+ people to be themselves. In progressing to the highest ranks of corporate leadership, the leaders interviewed for the report often faced discrimination and had to make personal sacrifices. As a result, many chose not to disclose their LGBTQ+ identity until late into their careers.
The report said many companies need to go much further to foster inclusivity and ensure inclusive practices and ways of working are systematically embedded.
it also said that without transparency and evidencing of progress, corporate commitment to equality risks remaining aspirational rather than being truly attainable.
Sir Jon Thompson, FRC CEO, said: ‘Despite progress, many companies need to rise to the challenge by actively championing LGBTQ+ inclusion and progression.
‘Creating inclusive cultures is not just the right thing to do, it is good for business, can generate higher levels of entrepreneurialism and innovation and help to attract and retain the best talent. A lack of inclusivity on the other hand is a huge risk to business.’
FRC’s report, Building more open business, is here.
By Pat Sweet