Breaking the mould: Hampton-Alexander Review published on women leaders in FTSE companies

United KingdomScotland

The Hampton-Alexander Review, published earlier this month, aims to improve the number of women in senior leadership positions.

Beyond the boardroom

The Hampton-Alexander Review continues the progress made under the Davies Review for Women on Boards. Currently 25% of those sitting on FTSE 100 executive committees, and their direct reports, are women (a target set by the Davies Review and achieved in 2015). The Hampton-Alexander Review sets a new target, to achieve 33% of representation of women in the executive pipeline by 2020. This target is wider than set by the Davies Review, in that it also extends to the FSTE 350.

A key theme of the Hampton-Alexander Review is that there is no room for complacency if industry is to reach this ambitious target. Twelve FTSE 100 boards, highlighted and named expressly in the Report, still have all-male boards and a further number show only marginal signs of progress towards the 2020 ambition. Also, less than 19% of executive committee positions in the FTSE 100 are held by women, creating a significant bottleneck before board level. The Hampton-Alexander Review therefore goes further than focussing on board positions: the new recommendations tackle leadership in a wider guise, including recommendations on executive committees and other senior leadership positions.

The Hampton-Alexander Review recommends a voluntary target of 33% representation of women for FTSE 100 executive committees, and their direct reports, by 2020. Notably, the Review only makes this recommendation in respect of the FTSE 100 and not the wider FTSE 350, where there is still much work to be done at executive committee level.

In summary, the two targets to be achieved by 2020 are:

  • 33% of women on FTSE 350 boards; and
  • 33% of women on Executive Committee and Direct Reports to the Executive Committee in the FTSE 100.

No quotas… yet

Almost all FTSE companies provided their data for the review, which contains a series of insightful statistical analysis. The data shows that the voluntary measures adopted in the UK are gradually improving board diversity, but at a slow pace.

However, the Review stops short of recommending any system of quota, which has been deployed in Norway, France, Finland, Belgium, the Netherlands, and most recently, Germany. While mandatory quotas for boards will inevitably increase numbers, they do not necessarily address underlying symptoms, particularly in the executive talent pipeline, which is where the focus of the Hampton-Alexander Review now falls. With the emphasis remaining on ‘carrot’, rather than ‘stick’, the Review turns back to industry, to reflect and appraise its own progress towards meeting the 2020 targets.

Planning now for change ahead

It has long been recognised that companies benefit from the differing perspectives and influences a gender-balanced board can provide. The Hampton-Alexander Review also anticipates a direct economic effect, predicting an extra £150 billion GDP and an additional 840,000 female employees added to the UK workforce, if the targets are met.

Recognising that all companies will be starting in different places, the Review provides plenty of practical information to assist companies to achieve the proposed target and to reap the associated benefits, including a ‘How To’ guide, research on the “bias, myths and realities” of senior leadership in FTSE companies and industry insight from select CEOs. The report is available for download here. With 2020 not far off, the key to success will be taking action now.

CMS is a proud supporter of diversity and inclusion.