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The fifth and from the Hampton-Alexander Review has been published, following the 2020 deadline which required FTSE 350 companies to have at least 33% female representation on the board and in senior leadership roles. The report notes that ‘enormous’ progress has been made in relation to women in senior leadership positions over the last ten years, although this is principally in non-executive director roles.

The review was designed to report on and increase the representation of women in senior leadership positions and on boards of the FTSE 350 companies, from 2016 to 2020. It was an independent, voluntary and business-led initiative, which has been supported by the government. In his introductory letter to the report, Sir Philip Hampton highlighted that ‘enormous progress’ has been made and that women now make up around 40%, in aggregate, of non-executive directors on FTSE 350 boards. However, he emphasised that there is a ‘continuing challenge’, as women still represent only 14% of the executive directors in the FTSE 100.

Sir Hampton notes that the proportion of women executives on Executive Committees is also relatively low, despite recent progress, (around a quarter, with 92% of women on boards in non-executive director roles, versus 8% of women as executive directors), and that this ‘pipeline’ is key to developing the position of senior women on boards. Amongst areas that were identified as needing a lot more work was the lack of females in top positions such as CEO, Senior Independent Director and CFO.  The report highlighted that only about a third of women occupy Chair and Senior Independent Directors. Furthermore, as executive positions are more highly remunerated than non-executive directors, the gender disparities contribute to substantial gender pay gaps.

Currently, the FTSE 100 only has 8 female CEOs following the recent appointment of Jette Nygaard-Andersen at the helm of Entain in January 2021. Nygaard-Anderson was previously a non-executive director at the FTSE 100 gambling company, having been appointed in 2019.  Of the remaining 7, Amanda Blanc, CEO of Aviva, and Milena Mondini de Focatiis, CEO of Admiral, were appointed in 2020. While most companies have reached the 33% target, research conducted by Market Tracker for the 2020 AGM season highlighted that, for FTSE 100 companies, there were 21 new female appointments to the board within three months of the annual report being compiled. For 12 of these companies, the appointments resulted in female board representation exceeding 33%, demonstrating a last-minute attempt to boost numbers.

The FTSE 350 still appears to be struggling to increase female representation amongst senior management, with only 30% of the FTSE 350 reaching the target.  While this figure remains low, Market Tracker has noted sustained improvement over the past five years, with 62% of FTSE 100 companies boasting over 25% female representation at senior management level, up from 58% in 2019.

Sir Philip Hampton laid out four key recommendations for a range of stakeholders:

• companies should have a woman in at least one of the four roles of chair, CEO, senior independent director and CFO, and investors should support such best practice
• the Department for Business, Energy & Industrial Strategy (BEIS) and the Government Equalities Office (GEO) should co-ordinate government backed diversity initiatives in business
• companies should publish a gender pay gap for their board and their executive committee
• BEIS and GEO should annually review with investor groups any voting sanctions (such as ‘Red Top’ advice to shareholders) applied to listed companies which fail to meet the gender targets set, to maintain the progress made by the Hampton-Alexander Review.

Key statistics from the report include: 

• 65% (of the FTSE 350) achieved the target of having 33% women on boards by 2020
• 30% of companies achieved the target of having 33% women in leadership by 2020
• the number of women in the Combined Executive Committee and Direct Reports in FTSE 100 companies has increased to 30.6%, from 28.6% in 2019, representing the largest increase in women in leadership in four years
• the number of women in the Combined Executive Committee and Direct Reports in FTSE 250 companies has increased more slowly, to 28.5% from 27.9% in 2019
• the turnover rate has increased from 21% in 2017 to 30% in 2020
• the appointment rate of women has remained low since 2018—at 36%—with around two thirds of all available roles still going to men
• appointments to the role of finance director and chief information officer remain particularly low, at, respectively 17% and 16% in FTSE 100 companies and 16% and 9% in FTSE 250 companies

See also, Market Tracker’s trend report on Ethnicity in Corporate Governance Reporting, for more information on diversity and inclusion in publicly listed companies.