Life in the Boardroom – how have gender differences among non-executive directors taken shape over the past decade?
April 19, 2022
In our recent report Life in the Boardroom, our survey of 885 non-executive director and chair positions in the UK, comments from NEDs raised concerns over boardroom diversity with gender disparities reflected by the data too. Looking back at the past decade of Life in the Boardroom, has there been a change in the disparities over time?
Looking at the median earnings (adjusted for CPI inflation to 2022) of NEDs (not including chairs) produces the results charted below. There have been alternating differences between the genders; some years females appeared to earn more, then in our latest report we found that female NEDs earned 27% less than males at median. Overall, the time series could not to provide a statistically significant difference between the genders, i.e., there was no confirmation that gender differences were beyond the random variation of the data. This may be because firms often have an explicit policy outlining a specific fee paid to NEDs, such that NEDs often receive broadly similar compensation; contrast from say that of their executive peers whose compensation may vary with bonuses, incentives, etc. (UK NEDs are rarely awarded bonuses or equity).
Whilst our data do not demonstrate a clear gender disparity in NEDs’ fees over time, the same cannot be said for representation. Graphed below, our recent report showed that only 30% of the NED positions surveyed were female. Although there is a statistically significant trend indicating that the female share of board positions has increased by 2% on average per year.
The situation is yet less positive for chairs, our latest report showing that only 8% of chair positions surveyed were female. Although there is a sluggish, but statistically significant trend showing that the proportion of female chairs has grown by 0.6% on average per year.
The FTSE Women Leaders Review highlights that reasons why some firms have failed to bring about significant changes include business leaders being under-informed on the business value of diversity, insufficient target-setting for gender balance – particularly for top jobs like the senior independent director, chairs, C-suite, etc., and a lack of work to address habits and behaviours which promote a climate of inclusivity. Furthermore, the differing burdens of responsibilities outside work demonstrate the importance of flexible working arrangements. 28% of women reported an increase in their domestic responsibilities since the pandemic in contrast from 16% of men, and the ONS reports that 24% of female workers have caring responsibilities for a loved one in contrast from only 13% of male workers. This experience was described by one of our commenters:
“Virtual working has been a godsend to me as mother and the only woman in my Boardrooms. Any push back into the office for Boards will decrease diversity and make a London-centric, more traditional choice more likely.”
In summary, the apparent lack of a gender gap in NED fees over the past decade is a hopeful sign of progress, especially when considering 2021 ONS figures which suggest that the median gender gap for NEDs’ executive peers is 15.3%, and 8% across the entire UK workforce. But what good this does will be limited by the barriers women face to attaining board positions in the first place. Let us hope that the future brings continued and hastened change for the better.
Further information and data on the pay of NEDs and Chairs in firms of all industries and sizes, how they use their time, their opinions, their pandemic experiences, and more can be found in our 70+ page report on 885 boardroom positions, click here for a free preview.
Find out more about Life in the Boardroom here. Or to discuss any of the points raised in this article, please contact us.
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