“Voluntary quotas working” reports Hampton-Alexander review

The independent review charged with supporting FTSE 350 firms to increase female board representation and more balanced talent pipelines confirms it is "pressing ahead" with proposals to raise voluntary targets aimed at improving gender equality at senior levels.

Dame Helen Alexander Copyright UBM

Copyright: UBM

Picking up the key themes and recommendations from the Davies’ Review, Sir Philip Hampton and Dame Helen Alexander's panel has worked over the past ten months with the business community and other organisations to consider options and make recommendations aimed at boosting female representation below board-level in senior layers of FTSE 350 companies.

Raising the voluntary gender target

The government-backed review announced it is taking forward the commitment it made in July to encourage FTSE 100-listed companies voluntarily to aim for at least 33 per cent of their executive pipeline positions to be filled by women by 2020.While every FTSE 100 board now has at least one woman on it according to statistics due to be released this week, twelve FTSE 100 companies still have no women in their executive committees. By contrast, 20 FTSE 100 companies have already achieved the voluntary target for the executive pipeline.The new data are also expected to show a small increase in the number of women appointed to board positions in the past year, taking the proportion back up to 25 per cent, after a small decline following the end of the Davies Review, which took female FTSE 100 board representation from 12.5 per cent to 26 per cent.

FTSE 350 progress on voluntary gender targets

These latest figures also find eleven boards in FTSE 350 companies that still had no women on them. While this is an all-time low, it suggests the momentum towards greater diversity at senior levels must be maintained and the ongoing need for voluntary targets.In addition to the voluntary gender targets being raised for the UK's largest companies, the review is recommending the Financial Reporting Council amends the UK Corporate Governance Code so FTSE 350 companies must disclose the gender balance of their executive committees and direct reports to ensure transparency around how many women are in senior positions.To support FTSE 350 companies, SMEs and other major organisations achieve these targets, the government, 30% Club and Board Apprentice have announced the launch of a new Future Boards Scheme, giving senior women a unique opportunity to get board experience to progress their careers to the next level.

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Review extends gender focus beyond boardroom

Commenting on their latest proposals, Sir Philip Hampton and Dame Helen Alexander said: “It is clear that the voluntary business-led framework to improve the number of women at the top of British business is working and it is time to extend the focus beyond the boardroom.“We are launching the next stage in the journey where FTSE 100 companies will aim for a third of their all-important leadership roles to be occupied by women by the end of 2020.“We don’t underestimate the challenge the new voluntary target presents for many FTSE companies. However, we are encouraged by the breadth of experienced women ready and willing to step up, the significant efforts underway in many companies on this agenda and the ability of British business to work together to bring about change when it is needed.”

Government responds to review’s recommendations

Government and businesses have welcomed the proposals. Justine Greening, minister for women and equalities, said: “No woman should be held back just because of her gender. It’s vital we help more women get into the top jobs at our biggest companies, not only because it inspires the next generation but because financially business can’t afford to ignore this issue – bridging the UK gender gap in work could add £150 billion to our annual GDP in 2025.“We’ve achieved amazing things – we now have a woman on every board in the FTSE 100 and we have the lowest gender pay gap on record. But we have to push further and focus on the executive pipeline. I am sure that the ambitions set out by Sir Philip and Dame Helen will help us get more women into those top jobs.”Business Secretary Greg Clark added: “Sir Philip and Dame Helen’s review underlines the importance of an industry-led approach, building on the successes we’ve seen so far to increase the number of women in senior business positions. Boards and chief executives in particular must embrace the need for change and step up to the challenges set by this review to ensure everyone gets a fair shot at making it to the top.

Business supports voluntary approach

Josh Hardie, CBI deputy-director general, also supported the voluntary approach and positive steps businesses are taking: “These proposals are a welcome way forward to build on the progress we have made so far. The CBI supports the voluntary, business-led recommendations on new targets and public data disclosure.“Significant improvement has been made since Lord Davies’ review began in 2011, and companies must now maintain that momentum both at board and executive level.“Businesses are embracing gender diversity in leadership, as a part of our wider efforts to create inclusive workplaces that enable everyone to perform at their best.”Laura Hinton, executive board member and head of people at PwC, also believes it is right for businesses to raise their sights of gender equality in senior leadership roles and commit to the voluntary targest: “Introducing gender targets for boards has produced results and it’s right that those targets are now being stretched to 33 per cent and also extended to executive roles. This is an important move as management level is where diverse teams can really start to change the culture of the workplace."We know that an inclusive culture creates an environment where individuals truly believe they can be themselves and, therefore, deliver the benefits of a diverse workforce.”

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