Transparency is improving and companies in the FTSE 100 are on target to meet the voluntary goal of 33 percent female board representation by 2020, according to the government-backed Hampton-Alexander Review 2017.
But smaller firms in the FTSE 350 need to do more, write the authors of the report, which looks at 23,000 business leaders across 350 of the UK’s largest companies. ‘With just under a third of FTSE 350 leadership roles going to women in the year, this falls short of what is required,’ write the authors. ‘Almost one in two – or around 40 percent – of all appointments need to go to women over the next three years to achieve the 33 percent target.’
Six companies in the FTSE 100 achieve 44.4 percent female board representation: Diageo, Kingfisher, Merlin Entertainments, Next, Severn Trent and Whitbread. And while firms in the FTSE 250 might not have achieved as much overall, five of the top 10 performers boast at least 50 percent female board representation: Ascential at 57.1 percent, Jupiter Fund Management at 55.6 percent and Renewables Infrastructure Group, Royal Mail and Woodford Patient Capital Trust all hitting the 50 percent mark.
And almost all FTSE 350 companies provided data about the gender balance in their senior executive teams – something cited as ‘a huge improvement’ in just 12 months.
At the other end of the scale are companies including 888 Holdings, Just Group, Metro Bank, the London Stock Exchange and Sports Direct.
When the review published its initial findings in November 2016, it set voluntary targets that went beyond the board:
- Thirty-three percent female board representation in FTSE 350 firms by the end of 2020
- FTSE 350 companies to increase the number of women in the roles of chair, senior independent director and executive director on their board
- FTSE 100 executive committees to comprise 33 percent women, with the same figure reporting directly to the executive committee, by 2020.
This year chairman Sir Philip Hampton extended the voluntary target of 33 percent of women in senior leadership positions below board level to all FTSE 350 companies.
‘There should be an expectation in business that the selection process is based entirely on merit,’ says Hampton in the review introduction. ‘Given the disproportionate number of men to women in senior roles, business should question the soundness of their meritocracies.’
Recounting similar concerns from the buy side in the report’s welcome section, Hampton notes: ‘I was struck earlier this year by a comment from a major institutional investor, which said a shareholder should expect businesses to promote on merit, and that it was doubtful a proper meritocracy would consistently lead to a massive preponderance of white males at the top.’
Adding that the review shares ‘the skepticism of those who also doubt that limited diversity is consistent with a meritocracy,’ Hampton says he is looking forward to hearing ‘cogent reasons’ from firms struggling to identify women with strong executive abilities.
Noting the progress that has been made, the report points out that in 2011, women held only 12.5 percent of board positions in the FTSE 100. That figure stands at 27.7 percent today. But while there has been a ‘significant reduction’ in the number of all-male boards in the FTSE 350 since 2011 when the number stood at 152, eight companies are still without a woman on the board.
Acknowledging the increasing representation of women on boards, Hampton singles out executive committees as having a long way to go: ‘It is where the glass ceiling is most conspicuous. This will need to change if we are to make progress to the boardroom more sustainable.’