A new analysis of FTSE 350 boardrooms shows more women taking seats, but still a long way to go when it comes to the most influential positions.
Over half of new board seats on FTSE 350 companies in the last year have been women, according to a new analysis which points out that women occupy only 19% of the four most influential roles of CEO, Chief Financial Officer [CFO], Chair or senior independent director [SID].
According to executive search firm Heidrick & Struggles’ UK Board Monitor, 54% of board seats were filled by women over the past 12 months, the highest number of women directors since tracking appointments began. However, it says these changes could be due to the fact that FTSE 350 companies are attempting to get ahead of the curve to align with the upcoming Financial Conduct Authority (FCA) regulation, which is likely to be implemented by 2025.
The upcoming FCA regulation is likely to state that each FTSE 350 company must approach gender through the lens of influential positions, and have at least one woman in a CEO, CFO, Chair or SID position. The report found that 50% of FTSE 100 companies and 46% of FTSE 250 companies continue to have no women in any of the four critical leadership roles.
On other areas of diversity, the report finds that 22% of seats on boards are filled by ethnically diverse directors and that there has been significant progress in the number of FTSE 350 boards that have appointed a director who is Black, Asian, or another ethnic minority, from 59 to 123 in just one year. However, none of the FTSE 350 board Chairs appointed last year were of non-white ethnicity.
Regarding the age of board members, the report found that directors over the age of fifty-five accounted for 60% of the seats, while 5% of these seats were taken by those under 45.
The analysis also found that FTSE 350 companies gave a larger preference to those who lacked previous public board experience appointing many of who were first-time directors. The report shows that in 2021, there was a new cohort of Chairs that saw 6% of Chairs appointed into new companies. Moreover, of 64 Chairs appointed in 2021, the report found that 58% of these appointments were external and of the 10 Chair seats that went to women, 70% were external.
Alice Breeden, Partner and Co-leader of the CEO & Board practice, Europe and Africa at Heidrick & Struggles, said: “It’s clear that external and regulatory factors have had a substantive influence on the pace of change in the British boardroom…will have had a greater influence on the pace of change than the many commitments of intent that companies have made over the last five years.”
“While we welcome every step towards great diversity in the boardroom – we know that the challenge continues to intensify. With increased environmental, financial and socio-economic pressure, boards need to work harder than ever to ensure they create future-proof boards – boards that can deliver performance now and deliver for tomorrow on financial, social and environmental needs.”