Report highlights need for greater gender diversity in manufacturing

Published:  04 April, 2013

Manufacturing companies in the FTSE 100 have a higher than average number of women on their boards compared to the FTSE 100 overall according to a new report published by EEF, the manufacturers’ organisation, in partnership with Lloyds TSB Commercial Banking and Cranfield School of Management.

The report - the first major assessment of the role of women in senior positions in manufacturing companies - comes at a critical time given the debate over whether there should be statutory quotas for women on Plc Boards, and because of the national debate on the shortage of female engineers at all levels.

The report highlights that out of the 29 manufacturing firms within the FTSE 100, women account for 19% of board positions, which is slightly higher than the 17% average of the entire FTSE 100.

Of the 309 FTSE 100 manufacturing board seats, 59 seats are held by women. Women make up 23% of all Non-Executive Directorships (NEDs) and 8% of all Executive Directorships (EDs) within the Manufacturing FTSE 100, which is nearly identical to the entire FTSE 100 where women account for 22% of all NEDs and 6% of all EDs. 

The study also includes a new ranking of the number of women on FTSE 100 manufacturing boards.  GlaxoSmithKline tops the 2013 Female FTSE 100 ranking of manufacturing firms, with five women making up 33% of their board.  In second place is Diageo, with four women out of eleven directors.  The majority of companies (62%) have one or two female board members and just under a quarter (24%) have three female directors. Burberry Group and Diageo have the greatest percentage of women on their boards (38% and 36% respectively).

However, with 81% of directorships held by men, just like other sectors, manufacturers have some way to go in tapping into the full talent pool at levels of their workforce. Some commentators have suggested that the best way to address this is by introducing quotas for the numbers of women on boards.

EEF's analysis suggests that this would not address the underlying issue of the need to increase the pipeline of women with engineering and other skills choosing to work in manufacturing. Currently, nine out of ten engineers are male and, 20% of the manufacturing and engineering workforce is female compared to 49% in other sectors. Furthermore, since 2008 the number of female engineers has gone up just 1% to 6%. This leaves a huge disparity compared to the rest of Europe with 18% in Spain, 20% in Italy and 26% in Sweden.

EEF says it believes this disparity is due to a number of factors, not least the failure to encourage enough young women to study science related topics which has left half of UK state schools having no women studying A level Physics. To increase the pipeline of female engineers at all levels EEF believes there must be a national campaign to increase the number of women studying STEM (Science, technology, engineering and mathematics) topics to professional level, as well as to promote apprenticeships and other vocational routes into work.  

To achieve this, careers advice must focus on promoting science and engineering options at a much earlier stage in school than the current key stages 4 (ages 14-16) and 5(ages 16-18). As part of the campaign, EEF has also challenged manufacturers to get more of its apprentices and manufacturing graduates involved in going back into their schools, colleges and universities to promote careers in Industry.

Commenting, EEF CEO Terry Scuoler, said: “There is no getting away from the fact that women are substantially under-represented in manufacturing at a time when industry needs to be tapping into every potential talent pool to access the skills it needs.  

“Some will argue for quotas for women on boards but this would not address the underlying need for a substantial increase in the pipeline of women with engineering and other key skills going into industry. We need a huge national effort to make this happen and government, education, and industry itself all have a major role to play."  

Richard Holden, head of manufacturing at Lloyds TSB Commercial Banking said: “At present less than 10% of the UK's engineers are women, which compares unfavourably with most of the rest of Europe. If the UK economy is to fulfil its potential, we need to challenge the male dominance in the manufacturing industries. We cannot continue to exclude half of the population from successful careers in the sector.

Holden continues: “This report addresses the need for greater gender diversity at board level and highlights several examples of women succeeding at the very highest levels of the industry however more needs to be done to encourage women role models who can make a significant impact in addressing this gender imbalance. This needs to start at the grassroot level with education at school and more needs to be done to change the perception of manufacturing careers in the UK.”

Dr Ruth Sealy, deputy director of the International Centre for Women Leaders at Cranfield School of Management and report adviser commented:  “Two years on from Lord Davies’ report on the lack of women on boards, whilst encouraging increases have occurred, we must not get complacent about the low numbers of women on boards. It is encouraging to see that the manufacturing firms are not slipping behind overall, but we need to maintain the pace of change. Boards need to champion the issue and take proactive steps to identify and develop talented individuals within their organisations for executive directorships.  Mentoring is a vital activity to grow the female talent pipeline and enable high flyers to realise the possibility of career progression.”

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