'Defining moment' | Major UK firms hit boardroom gender balance target three years early, but some warn it's 'not enough'

Major UK firms hit boardroom gender balance target three years early, but some warn it's 'not enough'

Some of the UK's largest firms are making fast progress in boosting women’s representation on top company boards, with new data revealing that 40.2% of FTSE 350 Board positions are now held by women.

The findings come as part of the latest report by the Government-backed FTSE Women Leaders Review, sponsored by Lloyds Banking Group and KPMG, which was launched in Canary Wharf.

The report tracks the progress being made in breaking down barriers to progression of talented women into directorships and senior executive roles across business. The findings demonstrate steady progress in getting women leaders to the top table of business in the UK, with women’s board representation increasing by nearly 3% in 2022 across the FTSE 350 (40.2%).

FTSE 350 Leadership positions below the board for women are now at 33.5% and at 34.3% for the 50 of the UK’s largest private companies, published for the first time this year. Women now hold a third of all leadership roles in FTSE 350 Companies too, a huge milestone that shows the continuing progress that is ongoing throughout businesses. The next critical goal for business is to achieve a target of 40% women in FTSE 350 Leadership teams before 2025 - which UK business is on-track to meet.

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Business and Trade Secretary and Women & Equalities Minister Kemi Badenoch said: “I’m pleased to see that FTSE 350 companies have surpassed this target, showing that change doesn’t always require top-down interventions but can occur when everyone is pushing in the same direction.

“This progress is very welcome, and I’d urge business to keep up this momentum to achieve better balance in leadership positions as well as in boardrooms.”

Just over a decade ago, 152 of the FTSE 350 Boards had no women on them at all - this is truly a thing of the past now, with the presence of women on every board of the FTSE 350 and the vast majority of the 350 companies now having 3 or more women on their board.

With businesses hitting the 40% target for Women on Boards well ahead of schedule, it is clear that momentum is on their side and a sea change is still coming. Today’s results secure the UK in second place when compared internationally to other countries driving for more women on top public listed boards.

This is especially notable, as the scope of the UK achievement is across 350 public listed companies, and progress has been achieved on an entirely voluntary basis, rather than by a mandatory quota system that is enforced on businesses in many countries.

The UK’s unique business-led approach has paid dividends, with companies stepping forward to report their numbers, with high levels of success.

Minister for Women Maria Caulfield said: “Making sure the right people are in the top roles is not just morally right, it makes good business sense. I’m delighted to see this huge progress, years ahead of when we expected it.

“By working together, industry and Government can make sure inequality is a thing of the past - which is good for individuals, for businesses, and for our country.”

Nimesh Patel and Penny James, Co-Chairs, FTSE Women Leaders Review, said: "Achieving 40 per cent representation for Women on Boards is a defining moment and is testament to the power of the voluntary approach and the collective efforts of many businesses and individuals over the last decade.

"By extending the Review to include for the first time 50 of the largest UK private companies, our work now tracks progress of women in 30,000 leadership roles across all of big British business."

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Businesses across the country have changed direction over the past decade, with companies such as Greggs Plc, Severn Trent Plc and Vodafone Plc leading the way with more women than men on their boards. When it comes to Women in Leadership roles, companies such J Sainsburys Plc continue to perform well, following several years of strong increases.

Haleon Plc are further proof that change is already being instilled into British business, having only newly demerged from GlaxoSmithKline this year and already leading the way in the FTSE rankings.

Denise Wilson, Chief Executive, FTSE Women Leaders Review said: "The celebration this year is for achieving the 40% target three years ahead of the deadline, but it goes way beyond that as celebration of the entirely voluntary nature of this achievement and the combined and unstinting efforts of all the men and women in British business who over the decade have joined together to deliver real and unprecedented change.”

Now time to tackle parity at CEO level

While progress in diversifiying the UK's boardrooms is undoubtedly positive, it is just one battle in a war for greater parity. Laura Sanderson, UK Country Manager of Russell Reynolds Associates (RRA), argues that we must now look to tackle the lack of diversity at CEO level.

“The progress in today’s figures reflect a long-term shift in how businesses think about board appointments," said Sanderson.

"There is a growing recognition that teams which are diverse and inclusive will outperform those that aren’t; and that includes boards. Balanced boards will be more innovative and more effective at navigating the volatility, uncertainty, change and ambiguity of the current environment for business in the UK. Investors and regulators are right to demand this of companies.”

“But creating gender parity in the boardroom is not enough. While there has been great progress in opening up non-executive director roles to women, diversity in the top jobs is still limited. At the current rate of change, it will be around 70 years before there are the same number of male and female FTSE 100 CEOs. Companies need to continue to work assiduously on their executive succession planning, ensuring that they have a gender balanced pipeline. There are still some misperceptions around female CEOs, and the “glass cliff” phenomenon (whereby female CEOs are more likely to be appointed to crisis-stricken businesses and face unreasonable scrutiny from the media, the board or investors) is also a very real risk to progress.

“While the rapidly growing number of women in Chair, Senior Independent Director and CFO roles is an important part of the solution, it won’t fix the problem alone. Businesses must be more courageous and imaginative in backing talented women to take the next step. The belief that the CEOs of the future must look, sound and behave like those from the past is holding all of us back.”

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