On 28 February, 2023 the FTSE Women Leaders Review (the "Review") published its second report (the "2022 Report") on progress in the UK towards meeting its December 2025 target of FTSE 350 companies having at least 40% female representation on their boards. The great news, as we celebrate International Women's Day this month, is that that target has been reached three years early! It is also good to see the UK performing so well in this critical area of gender equality and fairness when compared to its international peers. (See "International comparisons" below)

Background

The Review is an independent body, supported by the UK Government and which is continuing the work of the previous Hampton-Alexander (and before that, the Davies) Reviews in encouraging much better representation of women on listed company boards in the UK. The Hampton-Alexander Review had set a 33% target for women's representation on boards (and also on executive committees (including direct reports) ("Executives")) by December 2020. The Review increased this target to a 40% representation by the end of 2025 and expanded the gender equality drive to include: 

• FTSE 350 companies having  at least one woman in the roles of Chair, Senior Independent Director ("SID") and/or as CEO or Finance Director ("FD") by the end of 2025
• further encouragement of key stakeholders to keep the monitoring pressure on FTSE 350 companies to meet any outstanding 33% target 
• coverage of unlisted businesses - large private companies and LLPs.

FTSE 100 Boards and Executives

Boards

The Report shows that women's representation on FTSE 100 boards stands at 40.5% (an increase on 39.1% at the end of 2021), with 431 of 1063 directorships being held by women. Only seven FTSE 100 companies still fall short of the previous 33% target. 

Senior directors and CEOs

In addition, 64 companies have at least one woman in one of the four key roles of Chair, SID, CEO or FD and four companies have women holding three out of those four positions. While in 2022 48% of board appointments for FTSE 100 companies were going to women, landing the big prize, the CEO role, remains stubbornly elusive for most women with only 9 CEO roles being held by women (compared to 19 Chair roles). Of course, the number of CEO positions is fairly limited - 265 among the FTSE 350 - and turnover in those roles is understandably low. Nevertheless, considering that 23% of the FD roles in these companies are held by women (an increase from 16% in 2021) and that the evidence shows there is a strong and growing pipeline of women Executives below the board level, the hope must be that it will not take long for this poor showing of women in CEO roles to be reversed. 

Executives

Women's representation among Executive ranks has also continued to improve - from 30.6% in 2020 to 34.3% in 2022. This is a notable increase considering the falling number of Executive positions over the period and reflects the increase that there has been in the rate of appointment of women to Executive positions (from 37% in 2021 to 41% in 2022).      

23 FTSE 100 companies already meet the 40% women Executives target with a further 31 companies meeting the previous 33% target. As regards the "functional executive roles" that women have, their lowest representation is as CIO (21%) and their highest is as Human Resources Director ("HRD") (69%). It is good to see that 60% of company secretaries are women though this falls to 39% when that role is coupled with the GC role. 

FTSE 250 Boards and Executives

These companies have also achieved the target for 40% representation of women on the board three years ahead of the December 2025 deadline. In some ways there has been a bigger success here since the increase to 772 women on FTSE 250 boards has been achieved against the backdrop of a reduced number of board positions. 48% of all available FTSE 250 board positions in 2022 have gone to women. 

Senior directors and CEOs

There's been good progress too in the number of women appointed to senior board positions in FTSE 250 companies as well. 144 companies have at least one women in one of the four key board roles mentioned above and 24 companies have two women in those four roles.

Executives

Rather less than half of FTSE 250 companies are meeting the previous 33% or current 40% women Executives targets and so there is clearly further work required here. At least Executive appointments seem to be moving in the right direction with the percentage of women holding Executive roles in FTSE 250 companies increasing from 28.5% in 2020 to 33% in 2022. The position with regards to the functional executive roles held by these women is fairly similar to that seen with FTSE 100 companies, with the lowest percentages of women holding the CIO position and the highest percentage holding the HRD position. Slightly lower percentages of women are company secretaries and/or GCs in FTSE 250 companies than is the case with FTSE 100 companies. 

Top 50 Private Companies

For the purposes of the Report, private companies have an annual turnover of £1 billion, a workforce of at least 4,000 employees and are headquartered in the UK without a listed parent. 

The position with the top 50 private companies largely mirrors what we have seen with FTSE 350 companies with regards to women holding Executive leadership positions, standing at 34.3%. This percentage however drops to 25% when looking at the position of women in equity partnerships (including a few large law firm LLPs). 

The representation of women at board level in these private companies is less good when compared to FTSE 350 companies, standing on average at 31.8%. 

International comparisons

The UK started later than many of its peer jurisdictions with a drive to address gender imbalance on company boards and, unlike many countries in continental Europe and also California, it has remained in a minority in sticking to a voluntary, rather than to a quota, approach to improving women representation on boards and in Executive positions. Despite all of that, the UK now ranks second (40.2%), behind France (44%), in terms of the percentage of women on boards but because there are far more companies included in the FTSE 350 than in the other indices relevant to other jurisdictions' rankings, the UK can boast many more women on its boards than the next highest ranking jurisdiction in terms of absolute numbers - 1203 followed by 406 for California. 

The following table, taken from the Report and showing 2022 performance, certainly makes interesting reading. 

Final thoughts 

Remarkable progress has been made in the UK since 2011 when the Davies Review was launched and women's representation on listed company boards languished at a miserable 9.5%. After just 11 years we now have 40% representation (and not before time!).

It is also notable that this has been achieved with an energetic voluntary approach, supported strongly and consistently by the Government and by investors and the UK's leading companies, without the need for legislative or regulatory mandatory quotas.

Investor support has been very visibly demonstrated by their monitoring and tracking of listed companies' progress in correcting the gender imbalance on their boards. This has included registering protest votes against the annual re-election (as the UK Corporate Governance Code (the"UKCGC") requires) of certain directors where insufficient progress has been seen to be made. They have been supported by certain proxy voting services recommending votes against the Nomination Chair where the 33% target is still not being met.

Regulatory support has come from the board diversity priorities emphasised by the UKCGC and more recently and specifically by the FCA's listing rule changes requiring detailed disclosure of board diversity composition (with a 40% target for women's representation). Government support has come from its backing of the Review and its predecessors, the Hampton-Alexander and Davies Reviews, and also from legislative changes mandating gender pay gap and gender numerical reporting, for example.

None of this is to say, of course, that the mission has been accomplished or that there are no dangers of complacency creeping in as we celebrate reaching the 40% targets three years early. We only have to look at the lamentably slow progress in seeing women holding more CEO roles to recognise that we are still some way off from realising the undoubted advantages to UK plc (and the UK more broadly) of having a much greater gender diversity balance on UK boards - with the distinctive views and approaches women can offer to the increasing business, economic and social challenges that all businesses are facing. And of course, gender diversity is just one part of diversity itself. We face an even bigger challenge in addressing the very significant underrepresentation of ethnic minorities on UK boards! Let's hope the rate of progress we have seen in the rebalancing of gender diversity on boards will be mirrored in tackling these other diversity imbalances, both at board and senior executive levels.