London, 9 July 2019 – A lack of genuine diversity at the top of British business suggests that there will be little change in the C-Suite in coming years, according to research out today by ICSA: The Governance Institute, London Business School’s Leadership Institute and Elisabeth Marx Associates.
Based upon comparative research with ‘A View at the Top’, which looked at the composition of FTSE 100 boards in 1996, this latest research ─ launched today at ICSA’s Annual Conference in London ─ finds that, while there has been progress in gender diversity at non-executive director level, boards remain more obviously male, as well as significantly whiter than the British population. What is more, directors are increasing in age, with little diversity in terms of educational or career background.
According to Professor Randall S Peterson, Academic Director, London Business School Leadership Institute the picture looks set to continue as next generation directors are equally as elite-educated and male as current executives:
“In many of the headline-grabbing areas that the initial 1996 research uncovered there has been genuine and sometimes radical change, such as the increase of female directors from 4% to 28% and international experience in the boardroom climbing from 24% to 57%. In other areas, however, little has changed: a quarter of all directors are educated at Oxbridge or Harvard and the percentage of female executive directors has climbed from 1% to just 3%. Alarmingly, in some ways the boardroom is becoming significantly less diverse, such as the increase in the percentage of directors with a background in finance and a growing lack of international experience, which could potentially narrow the focus in British boardrooms.”
Board changes between 1996 and 2017 are as follows:
“Since I first reported on the state of FTSE 100 boards, board size has reduced, particularly in terms of the number of executives. This raises a number of important questions about how well the non-executives know the executive bench strength and the extent to which CEO selection might be affected by direct in-depth exposure to fewer executives. Moreover, the prevalence of directors with an accountancy/finance background carries a risk that Nomination Committees might be recruiting in their own image and are not sufficiently diverse to look at the broadest range of non-executive candidates. We need a much broader definition of diversity, reflecting the complexity of business and addressing a wider set of diversity criteria all at the same time, rather than a ‘piecemeal’ approach”, suggests Dr Elisabeth Marx of Elisabeth Marx Associates.
According to Peter Swabey, Policy and Research Director at ICSA: The Governance Institute: “One way that boards are judged is whether they represent the population they serve. We have come a long way since 1996, but there is still a distance to go. The narrow focus on getting women into non-executive roles, for example, seems to have inhibited the progression of women into executive roles. This suggests that any future diversity initiatives, whether focusing on gender, ethnicity or age, should consider the potential downsides right from the outset. Given the pressure on boards to better reflect the customers they serve and public pressure to address social issues such as climate change, should we expect greater racial and ethnic diversity on boards, and companies to be taking a stronger hand in addressing their carbon footprint in another 20 years’ time? The answer is undoubtedly ‘yes’.”
- Ends -
For further information, please contact Maria Brookes, Media Relations Manager: firstname.lastname@example.org
+44 (0)20 7612 7072
+44 (0)7890 649 143
Notes to Editors: