One fifth of FTSE 350 companies cautioned for lack of gender diversity at senior leadership levels

Saturday 29 February 2020

Nearly one in five FTSE 350 companies have received letters from the Investment Association (IA) and the Hampton-Alexander Review about the lack of gender diversity on their board and executive committees.

These 63 companies have been asked to outline what action they are taking to improve the gender balance in their leadership teams and ensure they meet the Hampton-Alexander targets of a minimum 33% of women on their board and in their senior leadership teams by the end of 2020.

Many companies have made great progress with the Hampton-Alexander Review recently announcing that across the FTSE 100 index, one third of all board positions are now held by women.

More however needs to done by FTSE 250 boards, with 24 cautioned for having only one women on their board. These so called 'one and done' boards were identified by the Hampton-Alexander Review as having made little progress beyond appointing one woman only. Thirteen companies have received a letter encouraging robust action to address the lack of women in their top teams for a second year running, in 2019 and 2020.

For the first time, companies with all-male executive committees were contacted. Letters were sent to 35 FTSE 350 companies, including four FTSE 100 companies, drawing attention to the lack of progress on women being appointed to their senior leadership teams. An additional, four FTSE 250 companies had an all-male executive committee and also only one women on their board.

Investment managers will be keeping up the pressure on companies during the 2020 AGM season to improve their gender diversity. IVIS, the Investment Association’s Institutional Voting Information Service, will continue to give a ‘red-top’, its highest warning level, to companies which with just one woman (or less) women on their board. This year, companies which have 20% or less gender diversity on their board or in their senior leadership teams will also receive a ‘red-top’.

Chris Cummings, Chief Executive of the Investment Association, said:

“Since the launch of the Hampton-Alexander Review we have seen steady progress with a growing number of women on boards. This is a critical year in which businesses need to demonstrate real change and meet the 33% target for gender diversity across their board and senior leadership teams.

“Diversity results in better decision-making and plays an essential role in a company’s long-term success. Investment managers have been clear that as a minimum they want to see companies meet this target for gender diversity, and those which fail to do so risk facing dissent in the AGM season.”

Sir Philip Hampton, Chair of the Hampton-Alexander Review, said:

"Expectations from Government and Investors regarding gender balance at the top of FTSE companies, and in wider business have been clearly set out. The vast majority of companies understand the business benefits, have taken robust action in response and been working hard to improve the representation of women in leadership for many years."

"Leaders of FTSE 350 companies that are still adrift of the 33% minimum target, need to rise to today’s challenge from the investment community and take swift action now to address the lack of women on the board and in their leadership teams."

Business Minister, Lord Callanan, said:

“It is not just government calling for greater diversity at the top of our FTSE 350 firms, shareholders are taking action too. The message is clear – those businesses that fail to take diversity seriously, risk losing the confidence of their investors. The work of the Hampton-Alexander Review is crucial to making the UK the best place to work and grow a business.”   
 

ENDS

Notes to Editors:

To reinforce the investors’ commitment to improving diversity on boards, this year, IVIS, the IA’s Institutional Voting Information Service will highlight companies that are not meeting investor expectations on diversity. IVIS will ‘Red Top’ the Corporate Governance Section of the IVIS Report any company in the FTSE 350 with:

• Women representing 20% or less of the Board
• Where there are one or less women on the Board (unless the one third target is achieved i.e. a board of three directors)
• Women representing 20% or less of the Executive Committees and their Direct Reports 

*All executive committee data as at June 2019

'One & Done' Boards second year running (2019 and 2020):

'One & Done' Boards for the first time in 2020:

All-male executive committees* as of June 2019:

'One & Done' Boads and all-male executive committees