Gender diversity in UK boardrooms is struggling to keep pace with European counterparts, with only 30.1 percent of company seats held by women, according to a new report by Deloitte.
The ‘Women in the boardroom: A global perspective’ report found the UK could reach gender parity as soon as 2027 if the progress continues at the same pace as the last two years, according to Jackie Henry, managing partner at Deloitte UK.
The UK entered the top 10 global ranking for the first time, moving from 13th to 9th place since the last report in 2019. However, the UK still lags behind six European nations, as well as New Zealand (31.9 percent) and South Africa (31.8 percent).
France (43.2 percent), Norway (42.4 percent) and Italy (36.6 percent) took the top spots on the global boardroom diversity ranking.
“Board diversity is a demonstration of an organisation’s commitment to inclusion,” said Henry. “Whilst the number of board seats held by those identifying as women in the UK is moving in the right direction, we’re still a long way behind our European neighbours with leaders France only 6.8 percent short of gender parity.”
She added that UK businesses need to be even more proactive in taking diversity targets seriously, improving disclosure and more transparent reporting.
In July, the Financial Conduct Authority (FCA) proposed a new listing rule that would require annual reports of listed companies to disclose whether specific board diversity targets were met, or state why they hadn’t been met.
However, the recent report showed slow progress towards global gender parity as on average 19.7 percent boardroom seats are held by women – up from 16.9 percent in 2019.
At this pace, the world could expect to reach near parity in 2045, said Henry.
Austria saw the largest increase from 19.7 percent to 28.2 percent of board seats held by women, moving from 19th place to 14th place. Similarly, USA for the first time has a place on the top 10 rankings with 23.9 percent of seats held by women.
“While it’s heartening to see that the world continues to make progress towards achieving gender parity, with the exception of a few countries, overall progress remains slow and uneven,” said Sharon Thorne, Global Board Chair at Deloitte.
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“The pandemic has dented efforts to achieve equality, making it even more important to move past discussion and take concrete actions to ensure inclusion within and beyond the boardroom including gender, ethnic and racial diversity among other characteristics. Increasing the number of women on boards is only the first step on a larger journey.”
Women in leadership
Deloitte’s report revealed companies with women CEOs have significantly more women on their boards at 35.5 percent compared to those run by men (19.4 percent). Likewise, those with a female chair had more women on boards at 30.8 percent compared to those with a male chair, at 19.4 percent.
The number of women CFO’s had increased to 15.2 percent, up from 11.9 percent in 2019, compared to women CEOs, which had increased to 6.1 percent, up from 5.1 percent.
“We know that leadership sets the tone for the rest of the business,” said Henry. “Increased ethnic minority and all-gender participation at every level are vital if businesses want to have a truly inclusive culture. There are other important dimensions of diversity that government, regulators, businesses, and investors should consider, including LGBTQ+, disability, neurodiversity and socio-economic background.”
“I believe that to achieve the strongest company boards we need a diversity of thought and experience – and that will only be possible by developing an inclusive pipeline of talent,” said Henry.
The average tenure for women on boards in the UK has decreased from 4.1 years to 3.6 years since the last report published in 2019. Compared to the tenure of men on boards which has slipped from 6.4 to 5.5 years.