Going further on gender
After a period of relative inaction from government, we are delighted to see the recent launch of the “FTSE Women Leaders Review” – a new government-backed monitoring of board diversity. Its predecessor, the Hampton Alexander Review, ended in early 2021, announcing its 30% women on boards goal had been met. While recognising the positive increase in gender diversity, at Women on Boards, we know that the shift to greater diversity in the boardroom is far from ‘job done’.
Truely representative targets welcomes
We called for continued action, in particular, increasing the target to what we have long campaigned for: a 40:40:20 gendered breakdown. We are therefore delighted that the new FTSE Women Leaders Review goes above and beyond its predecessor, calling for a minimum of 40% women’s representation in FTSE 350 Boards and Leadership by the end of 2025.
We welcome the FTSE Women Leaders Review not only for its more ambitious targets but for its broadened scope. The review’s scope extends beyond FTSE 350 companies to include the largest 50 private companies by sales. This is welcome as board diversity is important information for all stakeholders and investors to consider, given its significant correllation with strong business performance. At Women on Boards, we will continue to monitor FTSE All-Share firms outside the top 350 building on our 2021 ‘Hidden Truth’ report. We will be releasing our second analysis of their board diversity – looking at both gender and ethnicity – later this year.
Combining an intersectional approach
The FTSE Women Leaders Review represents a significant step in achieving gender diversity in leadership, however, in our view, the government missed the opportunity to take an intersectional approach in establishing this report. The Parker Review’s last report in early 2021 showed the goal of ‘one [director of colour] by 2021’ remained unmet across the FTSE100, and progress towards the same goal by 2024 across the FTSE250 appears slower.
Of course, the many Women on Boards members who are women from ethnic minority backgrounds fit into the categories for the both FTSE Women Leaders Review and the Parker Review. For those women, an intersectional approach to diversity is not a theoretical concept but lived reality. Women on Boards strong supports an intersectional approach to diversity, as through our work with over 35 corporate partners, we have seen that this is the most effective approach to reap the benefits of diversity of thought in a truly inclusive culture.
If the situation is far from ‘job done’ with regard to gender diversity, it is even more unacceptable on ethnic diversity. A new report “Black Women in the U.K. Workplace” by the Black Women in Leadership Network offers some fresh evidence – there are still no black women on boards of FTSE 100 companies; 44% of black women do not believe they are offered the same professional development opportunities as their non-black female colleagues; over half black women in senior leadership roles have resigned due to racial bias in the workplace. Not only are these pressing concerns for black women, but they are relevant to the entirety of the workforce, constituting real and significant barriers to achieving diversity at all levels.
We had hoped the government would consider combining its efforts to scrutinise and push for diversity on boards overall. We were delighted to see the FCA propose an even broader lens in their consultation on board diversity reporting requirements last autumn. Encompassing gender, ethnicity, but also LGBT representation, disability and social class is where we all need to aim. Yet we are still eagerly awaiting the FCA’s conclusion and commitment to action. We very much hope this will not be another missed opportunity to embed a more effective intersectional – and effective – approach to driving increased board diversity in corporate governance.