FTSE 350 companies urged to do more to get more women on boards.
The Government-backed review into women on boards is urging FTSE 350 companies to do more to meet the target of a third of women in senior leadership positions by 2020.
Figures published in the Hampton-Alexander Review’s 2018 report reveal that, although the percentage of women on the boards of FTSE 100 companies has risen from 12.5% in 2011 to just over 30% now, in the FTSE 350 nearly a quarter of companies having only one woman on their board and five boards are still all-male. Moreover, the number of women in CEO roles has fallen from 15 to 12 this year.
With the review having set a target of 33% women on boards of FTSE 350 companies by 2020 this means half the appointments to board positions will have to be filled by women over the next two years.
In the FTSE 100, four companies – retailer Next, online real estate provider Rightmove, financial services provider Hargreaves Lansdown and household goods and construction company Taylor Wimpey – have 50% or more women on their boards. Six FTSE 250 companies have met the same threshold.
The report also shows an increase in the number of women in FTSE 350 leadership positions just below the board, with FTSE 100 Executive Committees at over 21% women for the first time.
Ann Francke, CEO of the Chartered Management Institute, welcomed the progress, but said more needed to be done.
She said: “Businesses need to be put on notice. If they don’t meet relatively modest targets by 2020 then the Government must act.
“Our recent research shows that the gender gap starts at managerial level with 40% more men than women rising to senior management positions giving them a head start to getting to the board ahead of women. The glass pyramid for women remains – too many women at the bottom of the organisations and too few at the top – it must be broken if the number of women on FTSE boards is to be increased.
“CMI research also shows that the total CEO pay including all bonuses, pensions and perks for the average male is £5.8m compared to £2.6m for their female counterparts thus creating a 55% gender pay gap at the top of British businesses. Most concerning is that this gap is being driven by the more opaque parts of pay such as bonuses, long term incentive plans and perks. It shows the scale of the challenge that needs to be faced and the painfully slow progress being made.”
Calling for employers to publish action plans setting out how they actively plan to support women in leadership roles and close the gender gap, she added: “What could make a difference is the interest shown by investors in the gender make-up of the board which could force companies to change. Investors have made a difference in other aspects of corporate responsibility and they could play a very important role in accelerating change.”
Fiona Hathorn, MD of Women on Boards UK, called for a step change in recruitment practices to meet the 2020 targets.
She said: “Although most FTSE 350 companies are using headhunters, recruitment is still very much about who you know… Open advertising of board vacancies of all listed companies would break open the closed networks that prevent diverse candidates being considered.”