The lack of diverse representation on the UK’s Boards has long been of keen interest for us at McLean Public – across both the commercial and public sectors. The Boardroom is where strategic decisions are made, governance applied, and risks overseen. It has been widely acknowledged that Boards should be made up of competent and high calibre individuals who together offer a mix of skills, backgrounds and experiences. However, in 2004 less than 10% of the Boards of FTSE 100 companies were women. By 2011, that figure had barely nudged up to 12.5% and was something the 2011 Davies Review was determined to do something about, particularly given the figure for FTSE 250 companies was 7.8% for the same year – a pitiful figure given women were then 46% of the economically active population in the UK.
Of course, this has never been a gender numbers game. McKinsey’s research in 2007 is but one significant part of an overwhelming body of evidence which has consistently shown that strong stock market growth among European companies is more likely to occur where there is a higher proportion of women in senior management teams. Norway, France, Sweden and Australia were then quick to catch on to this and then, more importantly, do something about it. Fast forward to 2019 and the gender diversity of Britain’s Boards seemed to be finally changing. The drive following the Davies Review and the subsequent Hampton-Alexander Review gave targets where targets were needed and pressure just about everywhere else. Women by 2019 constituted 32% of FTSE 100 boards and 30% of 250 FTSE boards with companies such as Burberry Group PLC, Next PLC, Cineworld Group PLC, and Morrison Supermarkets PLC showing the way. Four years ago there were only two FTSE 350 boards made up of only men.
In 2017 the Parker Review noted that 51 companies in the FTSE 100 did not have a director from a minority ethnic background. Fast forward to the Parker Review update report 2023; it noted the progress made in recent years by FTSE 350 listed companies to bring ethnic minority directors on to their boards. As of December 2022, the FTSE 100 had 96 companies with at least one ethnic minority director. Overall, ethnic minority directors now account for 11% of all FTSE 250 board positions. Similarly, public sector organisations, in particular local government, has made great strides in trying to ensure its senior leadership is representative of the communities and customers its serves. The Civil Service has publicly stated it wants to be the UK’s most inclusive employer. In September 2022, for example, the Secretary of State (at the time) for Levelling Up, Greg Clark MP, launched a UK-wide pilot Boardroom Apprentice programme to develop aspiring board members for positions across the public and voluntary sectors. The programme aims to create a pipeline of more diverse talent to ensure public and voluntary sector boardrooms more closely reflect the communities they serve across the UK.
To be blunt, however, as we sit here in the closing months of 2023, there remains much more to do. Official figures from 2021 suggest female board members at FTSE 100 companies are paid about 40% less than their male counterparts. Meanwhile Bloomberg noted that of the 20 CEO appointments at the UK’s largest companies only 3 went to women. Also, the proportion of first-time, female and minority ethnic candidates appointed as non-executive directors by the UK’s largest listed companies dropped sharply last year. Ethnic minority candidates accounted for 15% of first time non-executive appointments – the lowest since 2020. The proportion of non-executive vacancies filled by women also fell to 51 per cent from 60 per cent a year earlier. The question remains as to whether some organisations are treating board diversity merely as a compliance exercise.
We at McLean Public remain optimistic that greater diverse representation on the UK’s Boards across all sectors will be realised, though the speed at which this will be achieved depends partly on how much organisations commit to more rigorous (and often challenging) methods of recruiting their leaders. Our commitment and particular approach has given us a unique perspective on which methods work and which are less effective. By widening our net of candidates we have developed connections to a more deep and varied network of senior diverse individuals. Meanwhile, our position as trusted advisors, rather than recruiters, means we have the market intelligence to spot the best candidates in non-traditional pools of talent. Together, those factors are producing our growing track record, which means our clients take our shortlists seriously. That runs both ways. Candidates, too, know we take their candidacy seriously. We will not put candidates forward unless they are right for the role, which builds trust on all sides. In the end, success is often at least partly down to going that extra mile-something we at McLean Public are always committed to doing.
If you’re struggling to diversify your organisation’s workforce, please get in touch as this is something McLean Public can support you with.