With FTSE 350 companies now asked to build the representation of women on their boards to 33% and British business in its sixth year of progress to increase the number of women in the boardroom, it is time to apply a similar framework to improving the number of women in the all-important leadership roles below the board.
The Hampton-Alexander Review (the Review) will build on the success of voluntary business-led approach of the Davies Review for Women on Boards, extending the scope to include FTSE 350 Executive Committees and the Direct Reports to the Executive Committee.
Focus now on Executive Pipeline
Although the approach is similar, making progress in the executive pipeline brings new challenges. There is a lack of public disclosure on gender performance at senior levels, particularly in the FTSE 250, so data gathering and the reporting of FTSE progress is a largely manual task. There are new stakeholders in CEOs, HR Directors and aspiring women to engage and a growing awareness of the multiple barriers to women in the workplace in seeking to progress through the ranks.
However, the good news is that almost all of the FSTE 100 chose to share their progress and it is evident that many companies have had significant efforts to improve the pipeline underway for some time. There is a healthy turnover of appointments at both the Executive Committee and in the Direct Reports at around 17%, albeit based on one year of data; and the appointment ratio of women to men is between 27% and 30% – again with some need for caution given the figures relate only to one year.
There are 12 All-male Executive Committees in the FTSE 100 which seems disappointing against a backdrop of British business having taken significant steps to ensure gender balance on their Boards. It is also disappointing there were insufficient data disclosures from the FTSE 250 to set a reliable starting point and baseline upon which to build.
The Recommendations set out in this report are a call to action for all stakeholders; FTSE CEOs and their companies, Government as regards public disclosures, Investors and Executive Search firms, all of whom have a key role to play in driving progress.
All the Recommendations relate to the FTSE 350 group of companies.
However, the new target announced of 33% women’s representation on the Executive Committee and in the Direct Reports by 2020, is for the FTSE 100 only at this stage. Although all companies will be asked to report gender performance separately for the Executive Committee and in the Direct Reports, the target is a combined one across the two populations.
Of course all companies will be starting in different places, with many already at 33% or above and others nearer the start of their journey. Despite this there is overwhelming support for the direction of travel and it is clear that the important thing is just to make a start.
There is a ‘How to’ section for companies to consider when starting on their journey, some inspirational CEOs, voices all of whom have already made good progress and share their thoughts, and three case studies setting out the value of a strategy, the right data and targets.
There are two excerpts from emerging research on bias, myths and realities. Not only are these interesting studies in their own right but demonstrate the complexity and depth of understanding now developing on the women in leadership agenda.
FTSE100 pace slowing
The focus of the Review’s first report is on the executive pipeline, but also reports on the progress on Women on Boards of the FSTE 350 as at 1st October 2016.
The pace of increase on Women on Boards has slowed in the last 12 months, particularly in the FTSE 100. The FSE 350 overall is at 23%, up from 21.9% this time last year. The FTSE 250 is at 21.1%, up form 19.6% with the FTSE 100 only marginally up at 26.6%.
There may be a degree of complacency with the FTSE 100 having reached the 25% target in 2015 and taking time to gear up to the new 33% target.
However, in uncertain economic and global times businesses are increasingly aware of the value of diverse perspectives.
UK strong player internationally
In the international arena the UK continues to be a strong player and admired for having made such progress under a voluntary regime. Companies will now need to redouble efforts in 2017 to stay there.
More to be done
As the Review launches its Recommendations in this report, British business starts in a good place, but clearly there will be challenges ahead and there is much more to do if companies are to harness the full extent of women’s skillset for the benefit of business and the UK economy.
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