Parliamentarians have called for a new target of women holding 40% of executive board positions. They also call for new disclosures of the pay gaps between male and female board members.
The call comes in a report from the all-party parliamentary committee on ESG after it looked at efforts to deliver gender equality in corporate leadership.
As well as a new target and disclosures, the committee also called for companies to report on post-maternity retention rates and plans to address failures in meeting gender targets.
They also call for targets in the FTSE Women Leaders Review to apply not only to FTSE 350 companies but to the top 500 businesses in the UK.
In a foreword to the report, Conservative MP and chair of the committee Alexander Stafford says: “The materiality of equality is indisputable and this needs to feed through to our corporate governance regime.
“We are seeing positive signs, but we can go further. One of the ironies of our investigations for this report is that arguably the country we can learn from most is our own.”
The committee also calls for a new government-backed consultation to pinpoint the “highest value and lowest burden” data disclosures that should be made by companies. They also want the government to consider a “successor” to the Sexism in the City consultation, run by Parliament’s Treasury committee, to explore the barriers to women succeeding in financial services.
According to the latest Women Leaders Review, women occupy 40% of executive and direct report roles in around one fifth of FTSE 100 boardrooms. A further 33 boards are at 33%-40%. A hefty 43 are below 33%. In the FTSE 250, 82 companies have less than 33% of executive and senior manager roles occupied by women, 42 are at 33%-40% while 39 can boast meeting the 40% target.
The report says 40% of leadership role appointments in the past year have gone to women. The number of “all-male” executive committees in the FTSE 350 had fallen from 54 in 2017 to just ten now.
There is a history of the City raising the number of women on boards through voluntary targets. The Davis Review in 2011 set a target of 25%, that was followed by the Hampton Alexander Review in 2016, raising it to 33%. The FTSE Women Leaders Review has raised it again to 40%. The Financial Conduct Authority has agreed that at least 40% of board members should be women.
Where they have been reached, targets have often been achieved through the appointment of non-executive directors. Parliamentarians seek a change of tack, highlighting the need for 40% executives to be women. Increasing representation among the top tier of managers has been a bone of contention among observers for some time. The ESG committee report says there needs to be a “greater level of ambition”.
The UK is not alone in wanting to improve the presence of women in companies. The Barometer of Gender Diversity in Governing Bodies in Europe this year found that around 80% of boards in the EU are approaching the EU’s mandated target of 33.3%.
Search firms have acknowledged a problem with getting women into executive roles internationally. Writing for Board Agenda, Luke Meynell, leader of the Russell Reynolds board and CEO advisory group, says: “There are still more men named Peter running Fortune 100 companies than women running Fortune 100 companies.”