In February 2011 Lord Davies launched a review which recommended that FTSE 100 boards should aim for a minimum of 25% female representation by 2015. By October 2015 it was reported that female representation on FTSE 100 boards had more than doubled to 26% together with a dramatic reduction in all male boards. However, since this date, further progress has been much slower with only a marginal increase in female representation, up to 26.6%.
The Hampton-Alexander Review
To build on the work of the Davies Review, and given the slower progress since October 2015, the Hampton-Alexander Review focuses on improving the representation of women in leadership positions at FTSE 350 companies and sets out five recommendations:
Women on Boards
A new voluntary target of 33% female representation on FTSE 350 boards by 2020 with an increase in the number of women appointed to the roles of Chair, Senior Independent Director and Executive positions.
FTSE Women Leaders
To improve the under-representation of women on Executive Committees and those who directly report to such committees (the “Direct Reports”), FTSE 100 companies should aim for a minimum of 33% female representation across their Executive Committee and in their Direct Reports by 2020.
Government Reporting Requirements
The FRC should amend the UK Corporate Governance Code so as to require all FTSE 350 companies to disclose in their annual report and accounts the gender balance on the Executive Committee and Direct Reports. In addition, the statutory reporting requirements for the Strategic Report should be clarified to explain what is meant by the disclosure of gender balance amongst “senior managers” to enable clearer comparisons between companies.
All institutional investors should have a clear process for evaluating disclosures and progress on gender balance for FTSE 350 investee companies at board, Executive Committee and Direct Reports level and should engage with those companies where progress has been slow and vote in accordance with their internal policies.
Executive Search Firms
These types of firms should continue their efforts to assist with increasing the number of women on FTSE 350 boards and support the further increase of the number of women on Executive Committees and in senior leadership positions.
The FRC has welcomed the recommendations of the Hampton-Alexander Review and “looks forward to working with the review team to improve reporting on diversity.”