FTSE 100 Boardroom Diversity – Current State of Play
Across the globe, there have been calls to increase gender balance. There is a similar impetus for having boards composed of directors from different nationalities, bringing different experiences and more varied cross cultural perspectives. Board independence is another key topic, thereby ensuring a balanced perspective in the boardroom and helping avoid potential conflicts of interest. Board diversity enables fresh perspectives and leads to better decision making, contributing to long-term sustainable performance and value creation.
Greater diversity in the boardroom has evolved as a major issue over the years. It is a key governance topic that has been frequently highlighted by institutional investors, regulatory bodies and other stakeholders.
Gender diversity in boardrooms has come a long way in the United Kingdom. In February 2011, when Lord Davies first called for greater female inclusion on UK boards, females comprised only12.5% of board positions in the FTSE 100. Data from Directorinsight shows that currently 27% of directors’ positions in the FTSE 100 are held by women. Although there are currently no male-only boards in the FTSE 100, there are, however, 7 companies in the FTSE 250 that do have male-only boards. The target in the UK for gender diversity is set to reach 33% female membership in FTSE 350 boardrooms by 2020, up from an initial target of 25% by 2015.
Despite the achievement of this significant milestone, some FTSE 100 companies are yet to achieve 25% female representation in their boards.
- 36 companies in the FTSE 100 are not in compliance with the 25% quota set for 2015
- 40 companies have met the 2015 quota of 25% but are yet to achieve 33%.
- Less than a quarter of the companies have33% female representation