The FTSE 100 Index’s most exclusive club just got smaller.
The departures of Anglo American Plc (AAL) Chief Executive Officer Cynthia Carroll and Pearson Plc (PSON) CEO Marjorie Scardino leave Burberry Group Plc (BRBY)’s Angela Ahrendts and Alison Cooper of Imperial Tobacco Group Plc (IMT) as the only women in charge at the U.K.’s biggest companies. The benchmark index has a combined market capitalization of 1.6 trillion pounds ($2.6 trillion) and its members employ about 5.7 million people.
“It does reflect badly on U.K. corporate governance,” said Manish Singh, who helps oversee $2 billion of assets as head of investment at Crossbridge Capital in London. “The U.K. is a G-8 nation. If we don’t see women represented well here, what hope do we have of achieving it in the rest of the world?”
Carroll’s exit today comes the same week the European Union failed to agree on a 40 percent quota for women on company supervisory boards by 2020. Deliberation of EU Justice Commissioner Viviane Reding’s proposal is set to resume Nov. 14.
Helena Morrissey, chief executive officer of Newton Investment Management Ltd. in London, disagrees with mandates.
“A quota doesn’t get you a CEO,” she said in a telephone interview. “This shows the importance of building a pipeline of strong women executives. We are talking about so small a number of women CEOs that I don’t think we can extrapolate a trend here.”
Morrissey started the 30 Percent Club in the U.K. to press companies to employ that many female directors by 2015.
“The focus should be to develop more female talent, assigning them on projects that give them the opportunity to be noticed and identified in the organization very early on, so they can eventually be represented more prominently at the top,” Singh said.
Carroll, the first woman, external hire and non-South African to run Anglo, will quit after the mining company lost almost a quarter of its value during her five-year tenure. Pearson said Oct. 3 that Scardino, 65, the first female CEO of a major U.K. company, will step down after 16 years.
Ahrendts, a 51-year-old American, has led luxury-goods maker Burberry since 2006, while Cooper, 46, became Imperial’s CEO in 2010. Scardino will be replaced by John Fallon, the head of Pearson’s international education business, while Carroll’s successor has yet to be named.
South Africa Charter
South Africa’s mining charter, which was created in 2004 and aims to make up for discrimination black people suffered during apartheid, also encourages the inclusion of women at all levels in the workforce. Carroll was one of only two women CEOs among the FTSE/JSE Top 40 Index in Johannesburg, leaving just Maria Ramos at Barclays Plc’s Absa Group Ltd.
The European Commission’s legal service warned that a binding quota for women may be illegal ahead of the Oct. 23 meeting, according to a person familiar with the talks. Lawyers said EU regulators don’t have the right to mandate binding targets for companies, said the person who asked not to be identified because the process is private. EU rules can require companies to make efforts toward a target.
Reding said she has “strong support” from other commissioners and drafted a compromise in line with lawyers’ guidelines to win consensus from her colleagues. She declined to give details, beyond saying she would retain the 40 percent target.