UK boards lag behind their US counterparts when it comes to professional and sector diversity, according to new research undertaken by Oxford Brookes University’s Centre for Diversity Policy Research and Practice.
The report, called “Changing Places: Women on Boards,” was commissioned by the 30% Club Higher Education Working Group and is the first major UK study into the exchange of board-level talent between business and academia. It found that movement between these two sectors is far more frequent in the US as academic Non-Executive Directors (NEDs) interact much more with businesses, government and other organisations outside academia than their UK peers. In fact, US company boards are over seven times as likely to include a senior academic compared to boards in the UK, showing that British business is overlooking talent in higher education.
There are currently just eight academic NEDs on the boards of FTSE 100 companies, whereas there are 59 academic directors serving on Fortune 100 boards in the US.
UK board chairs interviewed for the research saw two major areas where academic NEDs can make a valuable contribution: where the academic expertise matches the company focus and where they bring university executive leadership to company boards. However, they also highlighted an informal bias against having academics on corporate boards, expressing concern that academics might argue on intellectual rather than commercial lines and hamper board discussions.
Commenting on the findings Melanie Richards, Vice Chair at KPMG, which co-sponsored the report, in the UK, said:
“We need to move the diversity debate on from focusing solely on gender and better reap the benefits of having a mix of professional and sector backgrounds on UK company boards.
“There seems to be a degree of caution from corporates that bringing senior academics into the boardroom may result in longer deliberations for certain issues. However, by bringing together a more diversified group, business may benefit from more thoughtful discussions, which should strengthen the quality of decision making and outcomes.
“It is clear that academia remains a largely untapped talent pool for UK plc and there is much work to be done to promote mobility in both directions. Businesses need to open their eyes to the advantages of a more diversified board and the capabilities that senior academics, both male and female, can bring.”
The study also highlighted that the flow of female talent from business to university boards is relatively healthy compared to female academics entering corporate boardrooms. 33 per cent of women on university boards come from the private sector whereas less than 2 per cent of female NEDs in the FTSE 100 come from academia. This means cross-sector mobility also has huge potential to improve the gender diversity of boards.
Added to this, higher education is more gender diverse than business with women holding nearly 40 per cent of university boardroom roles. By widening their search to include senior academics, UK corporates would also be significantly widening the pool of female candidates.
This reinforces the point made in the Davies Review more than five years ago that women from academia are currently being overlooked as corporate board members. Nevertheless, there is a strong case for companies and universities to draw on each other’s female talent to achieve a double boost for gender and professional diversity.