UK companies will be told to bring more women into boardrooms

The UK government will launch a fresh five-year push for more women on listed company boards, to build on the work carried out by a previous campaign, the Hampton-Alexander review.

Ministers will this week tell FTSE-listed businesses not to take “the foot off the pedal” on efforts to improve gender diversity in their senior leadership. Officials will reopen the portal for companies to submit their gender diversity data for analysis and review.

The new campaign is expected to set fresh targets that at least 40 per cent of every FTSE board should be female, according to people familiar with the plans, while also encouraging more women through the ranks into executive positions to improve the “pipeline” of potential board candidates.

Review

The Hampton-Alexander review, which ended in the spring, helped boost the number of women on FTSE boards by 50 per cent in its five-year mandate.

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The review had set a target for at least a third of female board members by the end of last year. In January, more than 36 per cent of board positions were held by women in FTSE 100 companies, according to figures from data company BoardEx, falling to 33.2 per cent for FTSE 250 groups.

However, 16 companies still only had one woman board member, albeit down from 116 in 2015, while more than 100 FTSE 350 companies had still not met the 33 per cent target.

Ministers will this week say that diversity at the top can improve companies’ profitability, and will push for equal opportunity on merit rather than gender or race.

Business minister Paul Scully said the business case for diversity “is too strong to ignore”, adding: “UK business has taken great strides when it comes to gender diversity at board level. Companies shouldn’t take their foot off the gas. Evidence shows that more diverse businesses are more successful businesses.”

The new review is also expected to focus more on encouraging female executives, with the numbers of chief executives and chairs across the FTSE still relatively low. Women represent just 14 per cent of the executive directors in the FTSE 100.

Gaps

The pandemic is also feared to have exacerbated gender gaps in many businesses given women were often forced to stay at home to school children during the lockdown, according to equality campaigners.

An FT analysis of official data submitted by employers last month found that the gender pay gap in the UK widened across British businesses. Women were paid 87p for every £1 paid to men in April 2020, slightly worse than in 2019, when the pay gap was 12.8 per cent, and in 2018, when the gap was 11.9 per cent.

New leadership will be appointed to steer the review, according to officials, which is when the official targets for the new campaign will be announced. Helen Alexander died in 2017, while Sir Philip Hampton’s role came to an end with his review this year. – Copyright The Financial Times Limited 2021