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A step change is needed in pace if leading UK companies are to reach targets set for women in senior leadership positions, particularly at executive level, according to a report published today.
Despite improvements at board level after progress stalled in 2016, the Female FTSE Report, by academics at Cranfield School of Management and Exeter University Business School, highlights a big division between those companies which are committed to gender diversity and those which are not pulling their weight. It highlights the percentage of women holding FTSE 100 non-executive (NED) positions is at an all-time high of 33%, but the percentage of women holding executive directorships remains low at just under 10% on the FTSE 100 and under 8% of FTSE 250.
Moreover, on the FTSE 100, 34% of male non-executive directors hold senior independent director or chair positions compared to only 8% of women non-executive directors. In 2007, 6% of women held senior roles as non-executive directors.
The report comes after the Hampton-Alexander Review, an independent, business-led review supported by Government, set a series of recommendations in 2016 and a target of 33% women on FTSE 350 Boards and 33% women in FTSE 100 leadership teams by 2020.
The report finds that, since June 2016, the percentage of women on FTSE 250 boards has risen from 20.4% to 22.8% and 242 companies have at least one woman on their boards. However, there are still very few women in executive directorships across FTSE 250 boards – 38 in 2017, making 7.7%, less than the 10% on FTSE 100 boards. Women account for just six of the CEO positions on FTSE 100 companies and 10 of the CEO positions on the FTSE 250, as of October 2017.
Nevertheless, the report says that transparency is “much improved”, with all FTSE 100 companies submitting their leadership data and an automated collection process and robust guidance, leading to greater confidence and consistency in the data. Only 10 FTSE 250 failed to submit their data, lower than in other years. The Review said it was also clear that many companies had been collecting their data for the first time. “This in itself is real progress,” it said.
The report says there is a gap opening up between those companies which are making progress and those which aren’t. For instance, there are now 55 FTSE 350 companies at, or above the 33% target while 10 FTSE 350 companies have all-male boards. “Some companies have moved very fast, others very slow, some are just beginning and others yet to begin,” it says.
The report states: “The gap between companies working hard to shift gender balance at the top and those doing
very little has never been more obvious. Sector has marginal impact with star performers and laggards in every sector. It is the ambition of the leader that matters most. The goal and inherent benefits for British business are within reach. However, continued success requires robust action from stakeholders – and every company in the FTSE 350 to play
The report recommends that the Financial Reporting Council considers that disclosure in the Annual Report should include information on which type of external evaluation was undertaken, in addition to a summary of actions taken since the evaluation; and that the board evaluation industry adopts minimum standards for reviews, in the form of a Code of Conduct, kitemark or other method by mutual agreement.