The gender gap on U.K. corporate boards might be closing, but not when it comes to directors' pay, according to New Street Consulting Group.
Research from the leadership consultant found that the average pay for FTSE 100 female directors is 73% less than for male directors, averaging £237,000 ($323,000) for women vs. £875,900 for men.
That large pay gap at the board level is mainly because 91% of female directors at FTSE 100 companies hold non-executive roles instead of executive ones with higher remuneration, said Claire Carter, director at New Street Consulting Group, in a blog about the research.
Female non-executive directors at FTSE 100 firms averaged pay of £104,800 compared with £170,400 for men. The gap is even more dramatic for women holding executive roles, who average £1.5 million vs. £2.5 million for men in the same role, the NSCG found.
The research is based on the single total figure of remuneration for each director that the FTSE 100 companies reported in their most recent annual reports.
"Focusing solely on the percentages of directors that are women is not enough when trying to approach equality," Ms. Carter said.
Placing female directors in non-executive roles can also undercut a company's efforts to offer female role models if there is limited interaction outside the boardroom, she said. "Most businesses want to end the old boys club that exists at the top. The key to doing that will be ensuring that women have more executive responsibilities and are trained and prepared properly for taking on that responsibility. Allocating them the right assignments and projects is essential to that process," Ms. Carter said.
It could also affect financial performance, she said, citing a Financial Reporting Council estimate that at least one woman on the board could increase stock prices by 10% in just one year, with the figuring rising to 25% in five years for boards with 33% female members.
A similar research effort by the NSCG in April found that private businesses lag public ones when it comes to gender diversity on boards. The firm analyzed the U.K.'s 350 largest private equity-backed businesses, 350 largest family-owned businesses and FTSE 350 companies. It found that women make up 13% of private equity-backed company boards and 10% of family-owned boards, compared with 34% of FTSE 350 boards.
Large public companies have been under pressure to increase board gender diversity. A target set in 2016 by the Hampton-Alexander Review for FTSE 350 companies to have 33% female board-level representation was reached in December 2020, the NSCG said.
