Almost a fifth of FTSE 350 companies begin work this week wondering how they will address a lack of gender diversity on their boards and in their senior management.

The Investment Association (IA), a trade body for asset managers, and the Hampton-Alexander Review body have combined forces to write to 63 companies asking them to detail the action required to improve the gender balance in their leadership teams.

The letters went out to companies with all-male executive committees, including four in the FTSE 100.

In 2016 the review set a target of 33% of board positions and senior leadership roles being held by women by 2020. Recent reports revealed that a third of all FTSE 100 board seats are now occupied by women. However, the review and the IA said the FTSE 250 needs to be doing more.

According to Chris Cummings, chief executive of the IA, 2020 is a critical year for businesses to demonstrate real change. Companies who fail to heed the warning could face difficulties this AGM season, he warned.

“Diversity results in better decision-making and plays an essential role in a company’s long-term success,” said Cummings.

“Investment managers have been clear that as a minimum they want to see companies meet this target for gender diversity, and those which fail to do so risk facing dissent in the AGM season.”

Sir Philip Hampton, chair of the Hampton-Alexander Review, said a quick response was required.

“Leaders of FTSE 350 companies that are still adrift of the 33% minimum target, need to rise to today’s challenge from the investment community and take swift action now to address the lack of women on the board and in their leadership teams,” he said.

‘One and done’

Figures released by the IA and review showed there are 24 so-called “one-and-done” boards that have a single woman on their boards, and 35 all-male executive committees.

The IA named and shamed the companies with no women on their boards in a press release.

Shareholder action against boards is intensifying. Last week the Investment Association revealed 2019 saw 158 companies—an increase on 2018—added to the Public Register, a list of companies that suffer a shareholder vote of 20% or more against a proposal an annual general meetings.

A quarter of FTSE All Share companies—298—have now found themselves on the register following significant shareholder revolts.

Figures for 2019 saw 62 companies on the register for pay-related issues, while 103 were listed over director re-elections.

According to Andrew Ninian, director for stewardship and corporate governance at the IA, companies will be under close scrutiny in 2020.

“Investment managers are keeping up the pressure on companies to align executive pay with their long-term strategy,” he said.

“With a quarter of FTSE All Share companies ending up on the Register in 2019, investment managers will be paying close attention this year when companies bring their pay policies to the table to see whether they’ve heeded the high levels of dissent.”