There has been a ‘sea-change’ in the boardrooms of the UK’s biggest companies, with nearly 40% of FTSE 100 leadership positions now held by women, compared with 12.5% a decade ago.
The data, published by the government-backed FTSE Women Leaders Review, shows that in 2021 women held 39.1% of board positions among FTSE 100 companies, 36.8% in the FTSE 250, and 37.6% of positions among the FTSE 350.
This progress has led to the UK FTSE 100 moving from fifth to second in international gender diversity rankings among listed companies, putting it ahead of Norway whose listed companies have a mandatory quota system in place. France still leads the way, with 43.8% female representation at board level. The FTSE 350 is in fourth place.
However, the report recognises more work needs to be done and has set several new targets for 2025, including the recommendation that all FTSE 350 companies have at least one woman in the chair or senior independent director role, and/or one woman in the chief executive or finance director role.
Denise Wilson, FTSE Women Leaders Review chief executive, said: “Today the FTSE Women Leaders Review announces four new recommendations for this next stage, which will embed the progress and hard-won gains of the last decade and take business further on the journey to gender balance in the boardroom and in leadership.
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“We know there is much more work to do and no shortage of experienced, capable women, ambitious for themselves and their company across all sectors of business today. So while we continue to build on progress for women on boards, we need to firmly shift focus in this next phase to women in leadership roles at the top of the organisation.”
Minister for women and equalities, Liz Truss, said the government will shortly publish a range of measures to advance gender equality at work to increase opportunities for women and tackle the barriers that prevent them from reaching their full potential.
“It is excellent to see the progress being made, but we know there is more to be done,” she said.
“This government is committed to levelling up all parts of our country, working to tackle inequality and promoting equality of opportunity, including at senior level, so everyone can thrive.”
The FTSE women leaders report finds that among the executive committee and their direct reports:
- Female representation in FTSE 100 firms increased to 32.5%, up from 30.6% last year. In the FTSE 250 these figures were 30.7% and 28.5% respectively
- 44 FTSE 100 companies have met or exceeded the 33% target from the prior Hampton-Alexander Review, including 15 companies with 40%, or more women in their leadership teams
- turnover and the appointment rate of women over men are the key drivers of progress, but across the FTSE 350 leadership population turnover has dropped to around 22%, reducing the opportunities available to women this year. Almost two out of every three roles still go to men.
At board level it finds that:
- Female representation in the FTSE 100 stands at 39.1%, up from 36.2% at the beginning of 2021. In the FTSE 250 these figures were 36.8% and 33.2% respectively
- 85 FTSE 100 boards have met or exceeded the prior 33% target, and almost half of all FTSE 100 companies now have 40% or more women on their board
- Almost 200 FTSE 250 boards (77%) have met or exceeded the 33% target, and 92 FTSE 250 companies now have at least 40% female representation on their boards.
To maintain momentum, it the report recommends that:
- The voluntary target for FTSE 350 boards and leadership teams is increased to a minimum of 40% female representation by the end of 2025
- FTSE 350 companies have at least one woman in the chair or senior independent director role on the board, and/or one woman in the chief executive or finance director role by the end of 2025
- Stakeholders set best practice guidance, or have mechanisms in place, to encourage FTSE 350 boards that have not achieved the prior 33% target to do so.
- the scope of the FTSE Women Leaders Review is extended to include the largest 50 private companies in the UK by sales.
Greater diversity on corporate boards can be beneficial for key business priorities including productivity, profitability and climate action, said Alison Owers, global CEO at investor relations firm Orient Capital. However, she said that more action needed to be taken by smaller firms.
“We have seen vast improvements in gender diversity for the top FTSE 350 listed companies in the UK, but these tend to dominate attention in the diversity debate and are not fully representative of UK corporate culture. There are more than a thousand smaller listed companies on the main market and AIM indices, which tend to be more domestically focussed and reflective of our modern society,” said Owers.
“Board composition does not go unnoticed. Institutional investors are using their votes to encourage diversity and inclusivity of women and other minority groups on boards.”
Tony Russell, chief growth officer at change consultancy Proteus, said efforts to improve diversity must be accompanied by a “mindset shift” and acceptance of a change-led culture, or “businesses risk falling into the trap of virtue signalling and stagnating long-term progress”.
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“If women are to succeed in the long run, it is critical that the necessary resources be put in place including insightful research and data to drive workplace transformation,” he added.
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