Slow progress on gender diversity in boardroom

Female representation at boardroom level has been boosted by companies’ voluntary targets but there are still too few women in leadership positions.

The latest data from the government’s Hampton-Alexander Review, a body set up to increase the representation of women at boardroom level, shows that more than a third of board members across the FTSE 350 are women for the first time.

This comes a year ahead of schedule after the review set a minimum 33% target for women on FTSE350 boards in 2016.

While companies have made good progress, more still needs to be done.

The data found that 40% of FTSE 350 companies have failed to reach the target to individually ensure women make up 33% of their board.

Despite 51% of UK board appointments going to women, men still hold 92% of FTSE 100 chair seats.

The data also revealed that 18 boards within the FTSE 250 have only appointed one single woman board member. However, there is now just one all-male board, down from 152 in 2011.

The final review detailing whether companies have hit their gender diversity targets will not be published until February 2021.

Companies that are lagging behind need to act now and demonstrate real change to ensure they reach the target ahead of the end of December 2020.

Diversity results in better decision-making and plays an essential role in a company’s long-term success.

Evidence suggests that companies with a strong female representation at boardroom and top management level perform better than those that do not.

A 2018 study of 1,000 companies covering 12 countries by McKinsey found that companies in the top quartile for gender diversity on their executive teams were 21% more likely to experience above-average profitability.

They are better able to understand their customers and stakeholders and benefit from fresh perspectives, new ideas and broader experience.

While targets help, they must be coupled with action on cultural change to accelerate progress for future generations.

Companies need to look at what they have achieved so far and ask what they can do to get more women in leadership roles.