The State of Diversity in FTSE Leadership Roles
The recent FTSE Women Leaders Review highlights a pressing issue in corporate governance: the stark underrepresentation of women, particularly women of color, in top leadership roles. Despite ongoing discussions about diversity and inclusion, a new report reveals that only 13% of key positions—specifically chair, senior independent director (SID), chief executive officer (CEO), and chief financial officer (CFO)—are occupied by women. Alarmingly, less than 1% of these roles are held by women of color.
Insights from the Hidden Truth Report
The report titled Hidden Truth: Diversity & Inclusion in the FTSE All-Share, produced by WB Directors and sponsored by Protiviti, underscores a significant lack of diversity at the highest levels of corporate leadership. Out of 3,452 roles, only 25 women of color hold these prestigious positions, translating to a mere 0.7% representation. The situation is even more dire in AIM-listed firms, where only 0.3% of top roles are filled by women of color—just seven women across more than 2,000 roles. In contrast, the FTSE 100 shows a slightly better statistic, with 1.5% of senior roles occupied by women of color.
The Call for Intersectional Measurement
WB Directors advocates for a more rigorous approach to measuring boardroom diversity, particularly focusing on the intersectionality of gender and ethnicity. Fiona Hathorn, CEO of WB Directors, emphasizes the need for greater scrutiny and monitoring of diversity metrics, especially in the top four roles. She notes that while progress has been made at the FTSE 350 level, smaller companies must also be held accountable for their diversity efforts.
Current Representation in FTSE Companies
The statistics reveal a mixed picture of progress across different segments of the FTSE. The FTSE 100 has achieved 24% female representation in top four board roles, nearing the target of one in four. The FTSE 250 follows closely with 19.6%, while the FTSE SmallCap shows a marginally better figure of 21.7%. However, the two most senior positions—chair and CEO—remain the least represented by women, with only 7.9% and 6.8% respectively across the FTSE All-Share and AIM listings.
AIM Companies Lagging Behind
AIM companies are particularly lagging in gender diversity, with only 6.6% of top board roles held by women. Alarmingly, over a third of AIM companies have all-male boards, a significant increase from 18% in 2023 to 35% in 2024. Despite the overall female representation across FTSE All-Share firms being just above 40%, a staggering 35% of these firms have not met the target of having at least 40% women on their boards. Furthermore, 88% of AIM companies are projected to fall short of the 40% target for women in leadership roles by 2025.
Barriers to Progress
The Hidden Truth report also delves into the obstacles hindering progress in diversity and inclusion initiatives. A survey of 200 senior HR and equity, diversity, and inclusion professionals revealed a disconnect between intentions and actions. While 54% of respondents noted increased expectations from leadership regarding equity, diversity, and inclusion (ED&I), only 21% reported an increase in budgets to support these initiatives. Additionally, just 35% indicated that resources for ED&I efforts had expanded.
The Business Case for Diversity
Janet Barberis, managing director at Protiviti, highlights the importance of diversity in leadership. She notes that while there have been advancements in recent years, the glass ceiling remains a significant barrier. Research consistently shows that organizations with diverse leadership teams achieve stronger operational results. Beyond financial performance, diverse leadership fosters a broader range of perspectives, which is essential in today’s competitive business environment. This diversity also enhances an organization’s ability to attract and retain top talent, crucial for sustainable growth.
The Urgency for Change
Busola Sodeinde, a non-executive director and former CFO, expresses concern over the dismal representation of women of color in key board roles. She emphasizes that there is no shortage of capable women across various sectors, and it is imperative for those in power to take these findings seriously. The current landscape presents an opportunity for transformative change, and it is vital for organizations to act decisively to improve diversity at all levels.
Conclusion
The findings from the FTSE Women Leaders Review and the Hidden Truth report paint a concerning picture of diversity in corporate leadership. While some progress has been made, the journey toward equitable representation is far from complete. The call for greater accountability, intersectional measurement, and a commitment to genuine change is more urgent than ever.