In 2011, The Davies Review focussed a spotlight on the representation of women at board level, and found that only 12.5% of directors of FTSE 100 companies were women. Furthermore, the Review found that only 7.8% of board members of FTSE 250 companies were women.
University of Edinburgh Business School Entrance

Particular attention was drawn to the fact that 21% of FTSE 100 companies and 52.4% of FTSE 250 companies had absolutely no women on their boards. As a result of these findings, Davies set aspiration targets for the presence of women directors on FTSE company boards to reach 25% by 2015, with the elimination of all-male boards altogether. A 2021 review of Davies can only be judged a major success: 39.6% of FTSE 100 and 38.9% of FTSE 250 directorships were held by women.

However, new research led by the Business School (in collaboration with Dr Ian Gregory-Smith at Newcastle University) has looked behind these numbers, to gauge whether male and female directors are regarded equally. While it is generally difficult to see inside the operations of the boardroom, one quirk of the UK Corporate Governance Code affords an interesting and revealing insight.

‘This quirk happens when after nine years of boardroom service a non-executive director is generally regarded to have lost their independence,’ said Brain Main, Professor of Business Economics. The ‘comply or explain’ approach to corporate governance in the UK allows them to be kept on after nine-years, as long as some justification is provided to shareholders – usually a brief statement in the company’s Annual Report.

Main continues: ‘What we noted was that male directors were significantly more likely to be kept on at this stage than female directors, suggesting that the symbol of independence was much more important to women than men.’

This in turns suggest that women may be placed on boards for symbolic reasons, such as allowing the company to be seen to comply with independence criteria, or gender diversity and other governance guidelines, rather than being valued in their own right.

The emphasis placed by The Davies Review on avoiding all-male boards left singleton women directors (those being the only woman on their board) in a particularly strong position. This allowed the team to perform some statistical tests on the casual link between gender and the higher probability of exit after nine years of service. The data were able to confirm this causal link, and rule out other reasons such as women directors being different from their male counterparts in subtle and perhaps unmeasured ways.

‘These findings matter because they highlight the distance still to travel in terms of gender equality in the boardroom,’ said Main. ‘It is more than a matter of simply counting numbers.’

The Symbolic Management of Women on Company Boards: Evidence Using the UK Davies Review. British Journal of Management

Brian Main

Dr Brian Main

Professor of Business Economics