The sight of a woman in the British boardroom is rare enough; that of one in the managing director's chair [is] almost as exotic as a pair of nesting ospreys." These words were written by the late Carol Kennedy in a March 1984 article for Director.

Back then figures were hard to come by and Kennedy was forced to guess at the percentage of women who reached director level, estimating two per cent of Britain's 250,000 directors.

Today, according to Val Singh, co-author of the Female FTSE-100 report: "The number of top FTSE-100 companies with more than one female director has gone from 12 in 2000 to 29 in 2006—moving beyond tokenism." Yet Singh believes the lack of women getting to executive directorships is still a "serious issue".

The concern is with future supply. A survey by PricewaterhouseCoopers (PwC) published in March shows the number of female senior managers working in major UK businesses has fallen by over 40 per cent in the last five years. In 2002, 38 per cent of senior manager positions in the FTSE-350 were occupied by women; this is now just 22 per cent.

Grant Thornton's International Business Report, meanwhile, found the percentage of women getting senior management roles in medium-sized UK businesses (between 50 and 200 employees) has stagnated, rising only two per cent between 2004 and 2007.

Glenda Stone, chief executive of Aurora, a women-focused recruitment advertising agency, believes blue-chip organisations are "getting better, spending more on recruiting and retaining women, helping women back after maternity leave and understanding their needs," she says. It's the largest organisations and the smallest that are best at this sort of flexibility, she adds, with mid-sized companies literally stuck in the middle.

"They have a lot of catching up to do in order to compete with the big boys—unless they have a critical mass of women who are saying 'yes, come and work here, we like it', it is hard for them to attract top female talent."

So are professional women opting out? It's a question economist and author Sylvia Ann Hewlett raises in her latest book, Off Ramps and On Ramps. The book addresses the problem of the "hidden brain drain" of women leaving the workplace, only to return in a reduced capacity—or not at all. While Hewlett's research was primarily US-based, the issues are, she believes, universal and driven by global demographics. "Sidetracking women is an unaffordable luxury," she says.

Sarah Churchman, head of diversity at PwC, agrees, predicting that women exiting FTSE-350 companies in Britain will create problems for the future. "Businesses tend to pay more attention to gender issues in senior positions and there appears to be an assumption that a supply from the middle ranks will eventually feed through. For big companies at least, this pipeline is shrinking at a worrying rate," she says.

The UK government's sufficiently concerned to weigh in with a heavy endorsement of flexible working. "Creating more quality part-time roles is key to increasing the number of women in senior roles, which can extend a company's portfolio of skills, provide role models for younger, high-potential women and place companies closer to their customer base," says Meg Munn, deputy minister for women.

But this is a limited solution and fails to address the underlying question: are women making it to senior positions or not, and if so, why are they still leaving? Singh suggests one reason for the low numbers of women executive directors is that boards are getting smaller. "Most companies have gone down to four executive directorships, where before there might have been six," she explains. "This is largely as a result of the Higgs review, which recommends an even number of executives and non-executives on the board."

Hewlett's research found women's reasons for leaving the workplace balanced between family commitments such as childcare (in the UK, nursery costs far outstrip inflation, according to Daycare Trust figures) and, increasingly, elder-care pressures; and work-related factors such as an unsatisfying job—a complaint of 52 per cent of women in business—or a stalled career.

Some who reach the top don't want to stay there, says Singh. "The rewards don't match what they want in their lives," she explains. "Women are not so concerned with status, they want more challenge in a role and to feel connected to the firm."

Deidre Anderson of Cranfield School of Management recently interviewed senior businesswomen leaving a well known professional services firm and found a number of other factors at play, too. The company had introduced initiatives to encourage women to move up the corporate ladder, but a restructuring had sidelined some of them and left them unchallenged. "This led them to question the sacrifices they had made previously—such as the ongoing demands of travel and work-life balance—to constantly deliver high achievements," says Anderson.

A Chartered Institute of Personnel and Development (CIPD) report, Women in the boardroom: the risks of being at the top, published in March, found that a large number of business leaders will only appoint a woman into a very senior post in times of crisis and poor performance—leaving female leaders facing a form of hidden discrimination that leaves them more likely to fail than their male counterparts. Dianah Worman, diversity advisor at the CIPD, refers to this concept as the glass cliff. "Women are only considered when the situation is more risky," she says. "These old-fashioned attitudes are not only unfair and discriminatory towards women but they leave organisations shooting themselves in the foot."

Adds Singh: "Social connections are more difficult to make the more senior you are in an organisation. It's an issue common to men, too, but there are fewer role models at senior level to guide women."

Chey Garland, founder and CEO of Garlands Call Centres and  a mother of two, agrees: "Women I talk to often feel isolated with the challenge of being a working mum at board level. The reality is that kids get sick or need a doctor's appointment. Men don't have these extra pressures if they have wives," she says. And there's a much greater stigma attached to men taking leave for parental duties, according to Hewlett's research.
The fundamental issue, though, is cultural: "It seems that men tune into a way of working that is automatic, or second nature to them but which is not natural to a woman," explains Worman.

"Trying to associate with their male colleagues and behaving as a male manager isn't the natural management style for a lot of women," adds Chris Parke, who set up Talking Talent, a coaching and consulting firm
to help mentor companies and women before, during and after maternity leave. "They try to conform with the male majority but if they are not being authentic to themselves—their own personality and management style—then that is draining."

Parke believes the workplace has been designed for the progression of men—what Hewlett describes as the "male competitive model". What is needed is a deep-rooted culture change—starting with some simple maths. "Companies need to increase the number of women at each level of the company," he says.

But what would persuade the boss of a thriving business to throw out a perfectly good model in order to accommodate the "non-linear" workstyles? Alysoun Stewart, head of Grant Thornton's strategic Services Group, believes the UK has much to do to encourage balance between work and family commitments. We are taking a too-traditional approach to recruitment, too, says the CIPD's Worman. "We're still thinking traditionally but the old ways of doing things don't work in this world. We need more creativity, innovation and responsiveness to changes in the workplace and to be in tune with what's going on." Adds Parke: "What companies are still struggling with is losing women, particularly around maternity. They need to look at how they can support them better, for example with flexible working," he says.

But Garland questions the "have it all" expectations of working women: "At the time I had my twins I thought I'd work part-time but the reality was that my job is a big job and working part-time didn't combine well with the corporate world," she says. Although Garland believes women can have a family and rise to the top, she believes they need to be very organised and know how to prioritise. "I had to get a nanny so that I could work. Once I'd made that decision, it started to work for me."

Departing women don't always end up sidelined, either. Some of the most senior female executives can find themselves fulfilling work as a non-executive director. "For example, Penny Hughes, the ex-president of Coca-Cola UK, went off to have children and then came back and took on a portfolio of non-executive director roles. These women are making a career out of being NEDs," says Singh. There is evidence, too, of women leaving to set up their own businesses. The latest DTI small business survey reveals the number of businesses that are wholly or predominantly owned by women has risen to 17 per cent.

Cathy O'Donoghue is part of this trend. After her maternity leave, O'Donoghue was due to return to work as group HR manager for Tesco. But during her absence, a restructuring meant that her hours of daily travel had doubled. "This would have been physically impossible for me," she says. "I left Tesco and set up HR Champions so that I had more control over the hours I worked."

Hewlett talks about "extreme jobs", quoting Reuters's chair and well known diversity champion Niall FitzGerald: "There's so much pressure out there to look tough, to act tough. It's hard to go against the grain—our alpha culture is very strong." It is because of this, Hewlett predicts, that an even larger proportion of the workforce, both male and female, will need to "off ramp" for short periods in the future. "The out of date [organisational] model needs to be supplanted," she says. "Behind women, there's Generation Y, who want more work-life balance, and retiring baby boomers, who will want to chunk out work in more creative ways rather than retiring completely."

In a skills-starved, knowledge economy, only the most short-termist, inflexible employers would remain unmoved by the arguments for remodeling the workplace.