Report highlights ‘appalling’ lack of progress on FTSE female executives

The lack of progress in getting women into key executive roles in the top UK companies is ‘frankly appalling’, according to the lead author of the most authoritative report on women on boards.

The number of women on FTSE 100 boards has continued to rise this year (40%), but Cranfield University’s Female FTSE Board Report 2022, supported by EY, highlights deep concerns about the lack of progress of women into key executive roles and suggests the increase continues to be driven by boards appointing female Non-Executive Directors (NEDs) to comply with targets.

The report is critical of the slow progress of women being appointed into significant decision-making roles, such as Chair and CEO – and calls for executive succession planning to be taken more seriously at board level. To help address and tackle that failure the 2022 report includes a special project on how companies can boost female representation in the executive pipeline.

The Female FTSE Board Report 2022 reveals that 10 companies in the FTSE 100 have 30% or less female representation. And, out of the 413 directorships held by women across the FTSE 100, just nine were CEOs, 18 were Chairs and 377 were NEDs. The number of women in NED roles in the FTSE 100 has increased by 15% over the past year, whereas women in executive directorships increased by just 3% to 36.

Meanwhile, in the FTSE 250, the number of women on boards has increased from 35% to 39% year-on-year, with 110 companies already meeting the 40% target. But despite this improvement, for the third year running only 47 women hold executive directorships in the FTSE 250.

Evidence from Cranfield’s special project, conducted as part of the 2022 report, suggests the leadership provided by the Chair and the CEO is critical to developing a diverse executive pipeline. It found succession planning is often left to the CEO and calls for more Chair and Board accountability for delivering on diversity objectives.  The report’s recommendations include greater guidance for Nominations Committees – making their role in improving gender diversity more explicit; and for CEOs to recognise they have ultimate control and capability to disrupt the current hiatus.

Alison Kay, Managing Partner for Client Service at EY, UK & Ireland, said: “My observation is that companies have exhausted all the so-called ‘low hanging fruit’ and now it is time for tough decisions to push further into root and branch reform.

“Companies must now dig much deeper and go beyond complying with board level targets to transform their business and boost its performance. It is time that we now turn our primary attention to addressing, in an urgent way, the alarming lack of progress in gender proofing executive succession planning.”

Professor Sue Vinnicombe, Professor of Women and Leadership at Cranfield School of Management and lead author of the report, said: “We have come a long way since I started this report in 1999, but just having women in NED roles is not sufficient to have an impact on the executive pipeline.

“The lack of progress in terms of seeing women in these key executive roles is frankly appalling. For real change to happen, women simply must be in the significant decision-making roles of CEO and Chair.”

Lifetime gender wealth gap

Meanwhile, a new global study from WTW highlights the difference between the wealth accumulation of men and women at the point of retirement. The WTW Global Gender Wealth Equity report shows that on average women are expected to reach retirement with just 74% of the wealth accumulated by men, with the difference across all countries included in the analysis ranging from 60% at worst to 90% at best. The study also shows that the gender wealth gap at retirement increases with seniority. Globally, women in senior expert and leadership roles were found to have less than two-thirds (62%) of the accumulated wealth that their male counterparts enjoyed at retirement. For mid-level professional and technical roles, the gap was still substantial at 69%, but it narrowed considerably to 89% for frontline operational roles.

The study comes as research from PwC shows that average pay for a FTSE 100 CEO  in the UK rose by 23% this year, driven by a bumper round of bonuses boosted by lower targets set during the pandemic. Pay rose by about £700,000 to £3.9m over the past financial year and is now largely back to pre-pandemic levels.

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