Financial background helps boost more women into company boardrooms

A FINANCE background helps women get onto the boards of FTSE companies, according to a new report.
By The Newsroom
Published 11th Dec 2012, 06:00 BST

The research found that 45 per cent of female executive directors are financially qualified and 65 per cent in total have a financial background, while 26 per cent of their male colleagues are financially qualified and 44 per cent have a financial background. The report says that finance is the language of the boardroom and having the ability to communicate financial information establishes and builds credibility.

Dr Ruth Sealy, deputy director of the Cranfield International Centre for Women Leaders and report co-author, said: “A certain level of financial acumen is necessary for all board directors. But for women, having a finance qualification or functional background helps to break down some persistent stereotypes about women’s competence, giving them credibility, legitimacy and a common language that allows them to join the conversation of the boards.”

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The report, commissioned by the Association of Chartered Certified Accountants and the Economic and Social Research Council from Cranfield School of Management, also found that more than half of new female non-executive director appointments have a functional background in finance.

According to figures from BDO. 9.3 per cent of directors at the top 150 public and private companies in Yorkshire are female, while separate data shows that 15.6 per cent of FTSE 100 board directors are female. European justice commissioner Viviane Reding has been pushing the idea of compulsory quotas, attracting opposition from some member states. Recently, the European Commission set out plans for there to be at least 40 per cent women non-executive directors on the boards of public companies, excluding SMEs, by 2020. EU lawyers had previously warned compulsory quotas might not be enforceable, so the plans instead set out an “objective”.

Research by McKinsey & Co suggests that strong stock market growth among European companies is most likely to occur where there is a higher proportion of women in senior management positions.