FTSE 100 on track to meet board diversity target but other corporates lagging

Latest data released by the UK government-backed Hampton-Alexander Review shows that 32.1% of FTSE 100 board positions are now held by women, up from 12.5% in 2011. However in March 2019 there were still 69 FTSE 350 companies with just one woman or no female representation on their boards, and four companies with all-male boards.

Corporate governance expert Martin Webster of Pinsent Masons, the law firm behind Out-Law, said while the progress in larger companies was positive it masked a more significant issue.

“It is not that difficult to put a few women on the board as non-executive directors. The more important thing is where are the female chief executives and finance directors and how many women have you got in senior management?” Webster said.

In a new initiative, the Investment Association and the Hampton-Alexander Review jointly wrote to the 69 companies which had one woman or less on their boards in March 2019. Companies were asked to set out what actions the board is taking to ensure progress is made to meet the 2020 target of 33% female representation. Since then, 20 have appointed women.

A total of 14 companies which did not respond to the letters were named by the government, as were the four companies with all-male boards.

Webster said the process of 'naming and shaming' companies failing to achieve targets was a powerful measure as corporates were likely to respond to negative publicity.

He said it was notable that UK companies were producing an improvement in board diversity despite there being no legislative requirements for this, unlike in many European jurisdictions.

“It is an example of how we can change things through soft pressure. The UK has got to the same place as other countries without legislation, and allowing people to do it on their own, to an extent in their own time, and that has got to be better,” Webster said.

The Hampton-Alexander review was launched in 2016 and set FTSE 350 businesses a target of having 33% of all board and senior leadership positions held by women by the end of 2020. The latest figures show that the proportion of women on FTSE 250 boards is 27.5% and the proportion on FTSE 350 boards 29.1%.

Companies can submit their 2019 data on women in leadership positions, including executive committee members and direct reports to the executive committee, through an online portal until 31 July 2019.

Last year research conducted on behalf of the Financial Reporting Council found that only 15% of FTSE 100-listed companies were fully compliant with the reporting requirements in the UK Corporate Governance Code. The findings came ahead of the introduction of a revised Code in January 2019, which put a renewed emphasis on improving diversity at all levels.