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Study finds boardroom bias against women

Britain’s biggest companies are biased when appointing women to their boards, according to a new report.

A study of the country’s largest companies found that women have - at best - a 20 per cent chance of being made non-executive directors, and those hired are paid around eight per cent less than their male counterparts.

No bias at executive level

No pay gap or hiring bias was found at executive level. The significant public scrutiny of these roles and effective work of remuneration committees seems to counteract any gender bias at this level, researchers say.

The study also found there is no evidence to suggest that having more women in the boardroom increases a company’s productivity. Neither does having more women on the board make the company more profitable.

The report argues, however, that more women should be appointed for moral, if not economic, value.

Chances remain low

The study analysed the board composition and performance of British companies listed on the FTSE350 (Financial Times Stock Exchange) between 1996 and 2010.

The percentage of female directors increased over this period, from more than two percent in 1996 to more than eight per cent in 2010.

However, the chances of women being appointed to boards remain low. The only factor that significantly increases the probability is if a woman had recently stepped down from the board, which raises questions of tokenism.

There is clear evidence that the process of making non-executive boardroom appointments is not yet gender neutral. Once in the boardroom women executive directors seem to be paid as well as their male counterparts, but for non-executive directors the reward for women lags behind that of men.
Brian MainReport author and Professor of Business Economics at the University of Edinburgh Business School