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Wednesday 9 October 2019

The Readout

Diversity outside the FTSE 100 – where are the women?

There are fewer female CEOs in the FTSE 350 than men named David or Andrew. This must change

By Deborah Hargreaves

The question of gender diversity is actually a question about power: who really has it?

At a recent ThinkIn, we investigated just how diverse Britain’s businesses are, because while there have been great strides towards boosting women into the top-tier of our biggest companies, those outside the FTSE 100 have seen less progress.

While women are gaining some ground in non-executive board appointments, there are more than 85 per cent of FTSE 350 companies that have no female executives on their main boards. When women are promoted, they tend to be in HR or communications roles.

In our newsroom we discussed the strong business case for increasing diversity. Research by McKinsey is clear – it shows that companies with more diverse boards have a better financial performance with higher profits and better long-term value creation.

But only 3.4 per cent of chief executives in the FTSE 350 are women: there are fewer women in the role than men named David or Andrew.

Institutional investors are not pressing companies to become more diverse and there was a feeling in our discussion that we need to engage with them directly.

We also discussed how companies can be encouraged to become more diverse. Changes to the corporate governance code will make boards take note of these diversity issues – but will not be enforced unless investors are fully onside. Our future reporting will look to take account of these issues, including the lack of finance available for female-run start-ups.

Watch highlights from our ThinkIn here: 

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