FTSE 350 firms are still falling behind on targets to hire more senior women, the Hampton-Alexander Review has revealed.
While there has been progress around achieving gender parity on boards, the report chairs warned that companies are still not making enough female appointments below board level.
The report shows that 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 saw a stronger increase with women’s representation rising to 27.9% this year, up from 24.9% in 2018.
However, unless half of all available senior leader roles go to women this year, the FTSE 350 will not achieve the target of 33% women in leadership positions by the end of 2020. Roughly 175 companies still aren't on track to achieve the 33% target and 44 still have all-male executive committees. Only 25 women are in chair roles in the FTSE 350.
The picture of female diversity at board level was more promising. 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. This means that the FTSE 100 is close to meeting the 33% target for women on boards and is likely to do so ahead of the 2020 deadline.
The report also found that women hold 29.6% of all FTSE 250 board positions, up from 24.9% last year and 7.8% in 2011.
Philip Hampton, chair of the review, said the results showed a mixed picture of progress. “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," he said.
"While 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.”
The Hampton-Alexander Review also found there had been some progress around changing the “one and done” culture of getting women on to boards, with the number taking this approach reducing from 74 to 39 this year.
This 39 includes 11 new entrants to the FTSE index and 28 companies who made no progress on “one and done” for the second year running. These included JP Morgan’s American Investment Trust, Hilton Food Group, Domino’s Pizza Group, and City of London Investment Trust.
Across the FTSE 100, the strongest performers were Burberry Group, Next and Severn Trent. Among the 10 poorest performers were Fresnillo, Imperial Brands, NMC Health, Carnival and British American Tobacco.
Denise Wilson, chief executive of the Hampton-Alexander Review, said greater attention must be paid to every stage of the recruitment process to shift the dial.
“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,” she said.
“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.”
Jill Miller, diversity and inclusion adviser for the CIPD, said that while improved numbers of women in leadership roles in the FTSE 100 is encouraging, there’s still a long way to go. She warned that women's representation at senior level is still predominantly within non-executive rather than executive roles, highlighting that the CIPD is calling for a voluntary target of 20% representation of women among FTSE 350 board-level executive directors by 2025.
"Representation of women in executive roles, rather than non-executive roles is still far too low and needs to be addressed as a priority. The ongoing failure to address this highlights that too few businesses are thinking about talent planning and how they can make senior roles more accessible and attractive to women," she said.
"Organisations won’t truly benefit from a gender diverse workforce if women are still underrepresented in operational roles which have day-to-day influence and decision-making power. To address this, we recommend the establishment of a voluntary target for 20% of FTSE 350 board-level executive directors to be women by 2025 as a stepping stone towards achieving equal gender representation on boards."
Miller added that efforts to improve diversity among senior leaders must take an intersectional approach, highlighting a lack of racial diversity among leadership teams currently: “As we near the 2020 target, companies need to be bolder and more inclusive with their efforts. There is still a lack of ethnic diversity at the top of organisations. Not all women are benefitting equally from the progress that is being made and this imbalance cannot be allowed to continue."
Lorna Fitzsimons, co-founder of The Pipeline, agreed that most businesses are still far from reaching diversity targets. “The key to understanding what is happening is to purely look at women on executive committees and what progress has been made. In truth, we have seen no real change for the last 20 years,” she said.
“Our own research shows that based on current rates of progress, it will take until 2090 before we are able to achieve gender parity on Excos [executive committees]. This means that businesses are not going to achieve the targets that the government set for them within the one year they have left."
Fitzsimons added that tough targets on women on executive committees must be a priority for the next government: “Whoever wins the next general election has to set hard targets for the number of women on executive committees alone. If we just focus on this one target we would effect more lasting change which would positively benefit boards, as well as the future pipeline.”
