Top UK firms fail to hit boardroom diversity targets
Oil giant BP and retailer Sports Direct are among 35 of the UK’s biggest companies being taken to task for failing to meet targets to increase the number of women in the boardroom.
The Investment Association (IA) and the Hampton-Alexander Review have written to 35 firms in the FTSE 350 who have no or low female representation on the board, calling for urgent action.
The IA has singled out 14 companies in the FTSE 100, with BP and mining firm Fresnillo among those blasted for still having an allmale board as of last June, while it said firms including housebuilder Persimmon and travel group TUI have poor numbers of women on their combined executive committees and direct reports.
Another 11 firms in the FTSE 250 were also found to have all-male boards, such as Mike Ashley’s Sports Direct and support services firm Stobart Group, as well as 10 firms that chose not to report their gender diversity data to the Hampton-Alexander Review last year – including breakdown firm the AA and pub group JD Wetherspoon.
It comes as Legal & General Investment Management, which manages nearly £1 trillion worth of assets, has warned it will vote against the reappointment of chairs of the UK’s 350 biggest public companies if women do not make up at least 25% of the board.
The moves ramp up the pressure on firms ahead of the upcoming annual general meeting season, with pay, diversity and corporate governance in sharp focus as investors prepare to have their say on the way firms are run.
The IA – which represents UK investment managers who collectively own a third of the FTSE – is asking the 35 firms singled out to explain their poor gender balance and what steps they are taking to move towards the targets, as set out in the Hampton-Alexander Review in 2016.
The Government-commissioned independent review recommended that all FTSE 350 firms should have at least a third of their executive positions held by women by 2020.
Sir Philip Hampton, chair of the review and chairman at drugs giant GlaxoSmithKline, said: “Whilst the majority of FTSE companies are taking great strides to address the lack of women on boards and in their leadership teams, it is disappointing to see a significant minority of companies still making slow or no progress.
“The gap between those working hard to improve gender balance and those doing very little has never been more obvious.”
Chris Cummings, chief executive of the IA, warned that investors are becoming “restless and want companies to take action”.
He said: “A number of key investors have told us that they will vote against AGM resolutions on the grounds of gender representation.
“With the AGM season now in full swing, companies who are falling short should take urgent steps to outline what they plan to do to increase diversity.”
The IA added that diverse companies “typically outperform their less diverse peers and make better long-term decisions”.
Legal & General last year voted against 37 board chairs or chairs of nomination committees in the UK due to poor diversity – the highest number since 2015.
L&G also voted for the first time last year against all-male boards of S&P 500 companies in the US, on both board composition and the quality of diversity policies.
Business minister Andrew Griffiths said: “Diversity at the very top of businesses has proven time and again to make for more effective leadership.
“We need all FTSE 350 firms to pull their weight if we’re to become a world leader on gender diversity.”