A Review of Appointments to the FTSE 100 & FTSE 250 Boards
January to March 2019 Summary
This first report for 2019 follows our analysis of the FTSE 350 board appointments in 2018 which we published in February. In that report, we pointed to a huge gap in the gender diversity achievements at the executive director level. We showed clearly that women now have more say in governance of the largest companies, but men still dominate the execution. That has not changed so far in 2019, and we didn’t expect that it would. Creating a more balanced profile in the executive director ranks with more female talent will require a determined and consistent focus at multiple levels, far beyond the effort that brought a better balance into the non-executive director ranks.
In the first quarter of 2019, there were 110 appointments the boards of the FTSE 350 listed companies. This does not include “internal” moves amongst the non-executive directors, such as where one of the current board members is appointed as Senior Independent Director, but it does include all executive director appointments such as where the current CFO is appointed to the board.
The 110 new appointments include 29 executive directors, generally CEOs and CFOs, and 81 nonexecutive directors. Only 4 (13.8%) of those executive director appointments were female. Amongst the 81 non-executive appointments however, 39 (48.1%) were female. We can break this down between the FTSE 100 and FTSE 250 appointments as follows:
• Amongst the FTSE 100 companies, there were 10 (1 woman, 9 men) executive director appointments and 28 (14 women, 14 men) non-executive appointments.
• Amongst the FTSE 250 companies, there were 19 (3 women, 16 men) executive and 53 (25 women and 28 men) non-executive director appointments.
Again, we see the non-executive appointments at around 50/50 men and women, continuing the trend from 2018 and the relatively very low gender diversity amongst the executive directors is still a standout issue. It is interesting to take a closer look at how this translates at the FTSE 350 by industry sector:
• Banks – there are 10 banks in the FTSE 350 with 21 executive directors, but only two of them are female, one in the FTSE 100, Katie Murray at RBS and one in the FTSE 250, April Talyntire at OneSavings Bank.
• Clothing & Personal Products – there are only two companies in this sector but neither of them have female executive directors.
• Food & Drug Retailers – here you would certainly expect to see some females amongst the executive director ranks but again there are none while companies in the Food Producers & Processors sector have only one, Kate Swann at SSP Group.
• General Retailers – amongst the 31 executive directors in this sector, there are only 6 females. While this represents close to 20%, you would certainly expect this sector of all to have a greater female representation at the very top of the executive ranks.
• Health – Surprisingly, again, there are no females amongst the executive directors leading the strategy execution for the five companies in this sector.
• Mining – amongst the 11 FTSE 350 listed global companies in this sector, there are no female executive directors. In fact, even if we include the mining companies listed in the S&P 500 (US), S&P/ASX 100 (Australia) and the S&P/TSX 60 (Canada), there is still not a single female executive director despite all the great efforts of Women in Mining.
• Oil & Gas – there are 10 companies in this sector with 22 executive directors but only one of them is female, Jessica Uhl, the CFO of Shell.
There are other sectors represented by companies listed in the FTSE 350 but the above is suitably illustrative. None of this is to suggest that women should be shoehorned onto boards as executive directors simply for the sake of building the numbers. Appointing the wrong people, male or female, to these roles can seriously damage shareholder returns and the selection process is certainly more critical than for non-executive appointments.
What we are doing, however, is simply illustrating the magnitude of the challenge of identifying and nurturing more female talent through universities and executive ranks so that more women will enjoy equal status as candidates for these roles. While there is no short-term solution, continued exposure of the gap will hopefully help.