The latest report from the Hampton-Alexander Review highlights an urgent need for improvements in appointing women to senior leadership positions if targets for building the pipeline to the boardroom are to be met.
If half of senior leadership roles do not go to women this year, the FTSE 350 will not achieve its targets for building a more gender balanced executive pipeline to board-level positions, according to a report by the Hampton-Alexander Review.
The Review, set up by the Government to monitor boardroom gender diversity, oversees gender balance in over 20,000 senior leadership positions in FTSE 350 companies – the so-called pipeline to the boardroom.
While it finds progress towards its 33% target at board level, this is mainly due to non-executive women being appointed to boards. The harder task has been to build the pipeline of women below board level.
The report shows some progress, saying women’s representation in the senior leadership of FTSE 100 companies has increased this year to 28.6%, up from 27% in 2018. The FTSE 250 has seen a stronger increase with women’s representation increasing this year to 27.9%, up front 24.9% in 2018.
However, around 175 companies are still well adrift from the 33% target and the report highlights that there remain 44 all-male executive committees.
It states that unless half of all available roles go to women this year, the FTSE 350 will not achieve the target for women in leadership positions by the end of 2020.
Denise Wilson, Chief Executive of the Review, said: “There are over 900 women now serving on FTSE 350 boards, providing an ever-increasing pool of women with substantial board experience, yet only 25 women have been appointed into the Chair role, even fewer as women CEOs and showing little sign of change.
“Strong foundations have been laid and significant progress has been made since the journey began in earnest in 2011. The very senior jobs were always going to be the hardest of challenges. However, a stronger focus is now required at every stage of the appointment process to address the reasons
why top jobs aren’t going to women.”
Chris Cummings, Chief Executive of the Investment Association added: “Great progress is being made with Women on Boards, but it’s time for us to aim higher. This pace of change now needs to extend beyond the board to senior executive leadership roles if businesses are to demonstrate their diversity at all levels.
Investors have been consistent in their demands for greater diversity. It’s not just a nice to have. The research is clear: firms with diverse boards and management teams make better decisions, drive innovation and outperform their less diverse peers.”
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The report shows women now hold 32.4% of all FTSE 100 board positions, up from 30.2% last year and up from only 12.5% in 2011. The report says the FTSE 100 is very close to meeting the 33% target for Women on Boards and will do so ahead of the 2020 deadline.
It also shows that women hold 29.6% of all FTSE 250 board positions, up from 24.9% last year and only 7.8% in 2011. It estimates that, if the same rate of progress as was made this year continues next year, the FTSE 350 will be on track to meet the 33% target by the end of 2020 deadline.
However, it highlights that not all companies are making the same efforts and that the gap between those working hard to improve gender balance and those doing little “is each year more obvious”.
The number of boards with one token woman on them has reduced from 74 to 39 this year. This includes 11 new entrants to the index. Nevertheless, 28 companies have not improved on their one female board member in the last year. The report says these companies are “a long way off target and showing a seemingly tokenistic approach to gender balance”. There are two all-male boards down from five last year and 152 in 2011.
Sir Philip Hampton, Chair of the Review said: “This is the penultimate Hampton-Alexander Report and we enter our final year with great momentum behind us. If this progress continues into 2020, our targets for Women on Boards will be met.
“Whilst this is a key indicator of change at the top, strengthening the number of women in executive positions is critical to achieving long-term gender balance. We are still a long way from reaching the target for women in senior leadership roles below board level. Unless half of all appointments made this year go to women – our target for 2020 is not going to be met.”