The FTSE Women Leaders Review: Achieving Gender Balance report was recently published on 22 February 2022 and it contains some eye-catching statistics about gender diversity in the workplace (for example, in 2011, the representation of women on boards in the FTSE 350 was 9.5 per cent, in 2021 the figure is 37.6 per cent). It is the report’s first year, in what is the third and successor phase to the Hampton-Alexander and Davies Reviews. It is an independent, voluntary and business-led initiative supported by the Government, aimed at increasing the representation of women on FTSE 350 Boards and in their leadership teams.
The report covers the FTSE 350 and notes the vital role which businesses have to play in achieving a more inclusive economy whilst at the same time highlighting that there is more that needs to be done to dismantle the barriers that prevent women rising to the top. The four recommendations set out in the report are:
- Increased voluntary target for FTSE 350 Boards, and for FTSE 350 Leadership teams to a minimum of 40 per cent women, by the end of 2025.
- FTSE 350 companies to have at least one woman in the Chair or Senior Independent Director role on the Board, and / or one woman in the Chief Executive or Finance Director role in the company, by the end of 2025.
- Key stakeholders to set best-practice guidance, or have mechanisms in place to encourage FTSE 350 Boards that have not achieved the prior 33 per cent target, to do so.
- The scope of the Review is extended beyond the FTSE 350 to include the largest 50 private companies in the UK by sales.
The report shows that the FTSE 100 and the FTSE 250 are making good progress, with the number of women in the Combined Executive Committee & Direct Reports increasing. However, the number of women in the CEO role remains “flat and stubbornly low, and there is much more to do on Executive Committees, and in some key functional roles, in particular the Finance Director and the Chief Information Officer”. Although historically the focus has been getting women on the boards, there is now an increased awareness to increase women in leadership roles more generally and this is where the effort for many companies is currently focused to improve the gender balance.
As the report highlights, there is still more work to do and the focused examples below (set out in the report) might help employers to identify where their efforts need to be focused:
- The “Gender Say Gap” continues, with a predominance of male voices in business.
- 171 FTSE 350 companies still below the 33 per cent by 2020 Leadership target.
- 72 FTSE 350 companies still below the 33 per cent by 2020 Board target.
- Too few women in top jobs CEO, FD, Chair and SID roles, given overall progress.
- Low appointment rate for women with 62 per cent of all available roles in 2021 going to men.
- Mitigating the disproportionate impact of COVID-19 on many women in the workplace.
- Harder work remains to address behaviours and create inclusive cultures.
- Many business leaders under-informed on the business case and value of diversity.
- Many companies slow to take action, or not playing their part.
- Many by-standers, too few up-standers leading the change.
For those of you interested in seeing which FTSE 350 companies are achieving more gender diversity in their leadership (and those who are not), this report names the companies with detailed statistics. I was especially interested to read comments by Pascal Soriot (CEO of AstraZeneca Plc) and Milena De Focatis (CEO of Admiral Group Plc) about how achieving diversity requires monitoring and reviewing progress. Without the relevant data, it is difficult for companies to compute what they are looking to achieve and how it is best to drive progress.
Top tips for promoting workplace equality
I found the report enlightening and it got me thinking about how employers can best promote equality in the workplace. Workplace culture is key to achieving diversity, across all levels of an organisation. In turn the positive outcome of an inclusive workplace culture results in reputational benefits, a more engaged workforce, a talent “magnet” for attracting the best employees and the list goes on. With my employment lawyer hat on, a workplace where equality is promoted is also likely to avoid disputes. It really is a win-win situation!
Although recognising that cultural change is not easy and doesn’t happen overnight, here are a few (very brief) tips to help promote workplace equality:
- Having a policy on Diversity & Inclusion which covers employees being respectful of one another is essential. It is important that regular refresher training on Diversity & Inclusion takes place to avoid a “tick box” situation arising (for further information see our blog Don’t let your refresher training go “stale”).
- Make sure that those in leadership positions behave with dignity and respect towards the workforce. It is helpful if the leadership team is diverse in make-up so that there are a range of role models for employees across the business.
- Reducing pay gaps will also help promote an equal workforce. This could be a blog topic in its own right, but actions to avoid include discretionary pay systems, wide pay scales and managerial discretion over starting salaries. For further reading, see the Equality and Human Rights Commission’s advice on how to check for risky pay practices.
- A zero-tolerance policy to discrimination in the workplace should be widely communicated and the workforce should feel able to raise concerns and grievances freely.
- Data is your friend when promoting equality because this will give clear facts regarding the make-up of the workforce – how diverse is your workforce and are there any particular pockets where more of a diversity drive is needed? Carrying out regular anonymous staff surveys can be a great way of seeking the views of the workforce.
- Encouraging access to internal and external mentors and networks can help support members of the workforce who may have particular protected characteristics.
- D&I representatives in the workforce can be useful role models to promote a company’s D&I efforts and help drive a more inclusive culture. Role models who are both junior and senior can help with approachability. The Equality and Human Rights Commission has published a helpful guide for gender champions in the workplace.
There are lots of other initiatives and resources available but as always, adopting a genuine and transparent approach to promoting equality is key to developing a diverse, engaged and happy workforce.
If you require further information about anything covered in this blog, please contact Alice Parker or your usual contact at the firm on +44 (0)20 3375 7000.
This publication is a general summary of the law. It should not replace legal advice tailored to your specific circumstances.
© Farrer & Co LLP, March 2022