One in every two FTSE 100 executive appointments over the next year will have to go to a woman if the UK is to meet targets to tackle the gender imbalance across British business by 2020, a report has warned.
A “step change” at the UK’s biggest listed companies is needed if they are to hit a key metric where women make up at least a third of executive-level leadership teams by the end of next year.
The latest conclusion from the government-commissioned Hampton-Alexander review means more women across blue chip-listed firms will need to be propelled into key positions , including chief executive, chief financial officer or chief operating officer – as well as senior management that report directly to executives committees – in the coming months.
The review, first commissioned in 2016, has two targets: one for executive committees and one for board positions that includes a company’s chair, non-executives and the chief executive and finance chief. The latter target is likely to be met ahead of the deadline. Women accounted for 32.4% of those roles across the FTSE 100 by October, up from 30.2% a year earlier and 12.5% in 2011.
“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,” the review’s chairman, Sir Philip Hampton, said.
“Whilst 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 report showed that 28.6% of women were in executive leadership roles across the FTSE 100 by the time the data was collected this summer. That number was even lower across the FTSE 250 at 27.9%.
It applauded 10 companies for their performance, including Burberry, ITV, Whitbread and pharmaceuticals firm GSK, which has been led by chief executive Emma Walmsley since 2017. British American Tobacco, as well as miners Glencore, Antofagasta and Fresnillo were among the worst performers for having women in executive leadership positions.
There are just six female chief executives in the FTSE 100, including Alison Rose, who became the first woman to lead one of Britain’s biggest banks after taking on the top job at Royal Bank of Scotland on 1 November.
“Not all companies are making the same efforts, and the gap between those working hard to improve gender balance and those doing little, is each year more obvious,” the report said.
There are still 44 all-male executive committees across the FTSE 350, down from 50 a year earlier. However, there are now just two all-male-boards: property firm Daejan Holdings and software company Kainos Group. That is down from 152 all-male boards in 2011.
The Hampton-Alexander review claimed a victory after the number of so-called “one and done” boardrooms with just single female board member nearly halved from 74 to 39. It follows a successful campaign by the review and City investment firms, who criticised firms for taking a “tokenistic approach” to gender balance.
Investment groups highlight statistics showing that diverse companies tend to be more successful. Research by global consultancy group McKinsey has shown that companies with the greatest gender diversity in the boardroom are 21% more likely to be more profitable than their peers and 27% more likely to create superior value.
Chris Cummings, the chief executive of the Investment Association, said: “Great progress is being made with women on boards, but it’s time for us to aim higher. This pace of change now needs to extend beyond the board to senior executive leadership roles if businesses are to demonstrate their diversity at all levels. Investors have been consistent in their demands for greater diversity.
“It’s not just a nice to have. The research is clear: firms with diverse boards and management teams make better decisions, drive innovation and outperform their less diverse peers.”
