The Hampton-Alexander Review is an independent government commissioned review established in 2016 to increase the number of women in senior positions in FTSE 350 companies by 2020.
The joint letter asks companies to explain their poor gender balance and what steps they are taking to address the review’s recommendations which include for FTSE 100 and FTSE 250 companies to aim for a minimum of 33% women’s representation across their combined executive committee and the direct reports to the executive committee by 2020.
As at 30 June last year, six FTSE 100 companies had an all-male executive committee: BP, Fresnillo, Mediclinic International, Provident Financial (no longer in FTSE 100), Smurfit Kappa Group and St James’s Place.
The review also recommends FTSE 350 companies to aim for a minimum of 33% women’s representation on their boards by 2020.
In addition, 11 FTSE 250 companies, including Sports Direct and Stobart Group, have been targeted for having all-male boards.
The Baillie Gifford Japan Trust and the JP Morgan Japanese Investment Trust were identified among the FTSE 250 firms with all-male boards as at April 2018.
A further 10 FTSE 250 companies were targeted who chose not to report their gender diversity data to the Hampton-Alexander Review last year, including the AA, J D Wetherspoon, Wizz Air, WH Smith, CLS Holdings, Grafton Group, Martson’s, Melrose Industries, SSP Group and Telecom Plus.
Chris Cummings, chief executive of the IA, said: “A number of key investors have told us that they will vote against AGM resolutions on the grounds of gender representation. With the AGM season now in full swing, companies who are falling short should take urgent steps to outline what they plan to do to increase diversity.”
It comes after the UK’s asset management industry, which the IA represents, came under scrutiny for its pay gap problem after firms with more than 250 employees were obliged to report their pay practices to the government.
A common explanation given by firms for the gap has been the heavy skew of male employees in top roles at asset managers.
FTSE 100 companies with the lowest representation of women in their combined executive committee and direct reports, as at 30 June 2017 (the Hampton-Alexander target is 33%):
|The 10 FTSE 100 companies with the lowest representation of women in their combined executive committee and direct reports||% of female employees combined Executive Committee and Direct Reports|
|Ashtead Group PLC||10%|
|Smurfit Kappa Group LPC||11.6%|
|Imperial Brands PLC||12.2%|
|British American Tobacco PLC||12.5%|
|Reckitt Benckiser Group PLC||13.4%|
LGIM votes for diversity
Separately, Legal & General Investment Management (LGIM) announced Tuesday that it will also vote against the chairmen of boards of FTSE 350 companies if they have not already reached 25% women at board level.
The firm’s latest corporate governance report revealed throughout 2017 it voted against 37 board chairmen or chairmen of nomination committees in the UK due to poor diversity.
Overall it increased its votes against management during the year, opposing the reappointment of 2,807 company directors versus 2,362 in 2016 and voting against at least one resolution at 59% of companies (56% in 2016).
Last year also saw LGIM vote for the first time against all-male boards of S&P 500 companies in the US, on both board composition and the quality of diversity policies.
Sacha Sadan, director of corporate governance at LGIM, said: “Our clients are increasingly asking us about a broader range of topics, which has helped us to enhance our approach and to put emerging issues on the agenda. There are, however, themes that continue to resonate and throughout the year we’ve seen a focus on gender diversity, climate change and governance and culture, all of which we are continuing to engage on with companies.”