In 2011 women made up just 12.5% of FTSE-100 companies’ Boards, and 9.5% for the FTSE-250. As the final report of the Hampton-Alexander Review disclosed last week, the corresponding figures for 2020 were 36.2% and 34.3% respectively, exceeding the 33% target set five years ago. (Source: Hampton-Alexander Review, 24th February 2021)
Since the Coalition Government established the Hampton-Alexander Review’s predecessor, the Davies Review, in 2010 there has therefore been striking progress in the representation of women on the Boards of the UK’s largest listed companies.
Below these headline figures, though, the numbers remain altogether less worthy of celebration, and more a rallying cry for further action. For a start, I think the 33% target benefits from a ‘baseline effect’: in other words, if the starting point hadn’t been so woeful hitting the target wouldn’t look so good. Self-evidently, women remain underrepresented in FTSE-350 boardrooms.
Furthermore, if one digs a little deeper one sees how much further there is to go:
• Under half the companies in the FTSE-350 have met the 33% target;
• Women make up a smaller 29% of Executive Committee and Direct Reports positions;
• In terms of functional roles significant skews still exist, with women occupying 65-70% of Human Resource Director roles, but less than 20% of Finance Director roles, for example.
(Source: Hampton-Alexander Review, 24th February 2021)
All of this matters for several reasons.
First, there is plenty of empirical evidence and a wide body of research that shows diversity brings with it competitive advantage, and of course this goes beyond just gender. So many companies appear to be engaging in wilful acts of self-disadvantage by not appointing more women to senior leadership roles.
Second, on the subject of leadership, there is a clear ripple effect that originates at the top of British business. The more large companies set an example to their smaller and unlisted peers, the more likely it is this lead will be followed, driving a virtuous cycle in business success throughout the UK economy.
And finally, the more young women are able to see role models at the top of British business, the more likely they are to aspire to those positions themselves, again driving future competitive advantage.
I therefore think it is incumbent upon businesses of every shape and size to consider diversity in all of their recruitment decisions, without waiting for a lead from the top. Not to satisfy some abstract statistical target, but for their own good.