As Women Stall on U.K. Boards, $330 Billion Fund Takes a Standby and
Representation has been stuck at around 26% since late 2015
ConvaTec becomes first all-male board in FTSE 100 in 3 years
After five years of steady gains, women’s participation on British company boards has hit a wall.
Women occupied 27 percent of FTSE 100 board seats in May, little changed in the past 18 months. Only one in four board openings was filled by a woman in the past year, compared with one-third a year earlier, according to the Confederation of British Industry. And for the first time since 2014, a FTSE 100 company, ConvaTec Group Plc, has no women on its board.
Before the government in 2011 urged the U.K.’s biggest companies to adopt a voluntary goal of at least 25 percent female directors, women’s representation stood at 12.5 percent. The rapid initial response has often been held up as an example of how voluntary targets and moral suasion can be effective. Unlike many other European countries, the U.K. has no government-imposed quotas for women on boards.
This proxy season, some institutional investors are pressuring companies to adopt the goals. Hermes EOS, which manages $330.4 billion, now makes it a policy to vote against any board in the FTSE 100 that has “materially less than 25 percent women without a credible plan for adding them,” said Bruce Duguid, director of stewardship and engagement.
ConvaTec, which makes medical products, had not planned to go public in October 2016, with an all-male board. The company had identified one female candidate but she withdrew at a late stage, said Chairman Chris Gent. “It was very disappointing,” he said. ”I didn’t want to put the IPO off.”
Among slightly smaller companies, Hermes will only vote against those with no women on their boards. The investor recently voted against the re-appointment of the chairman of Rio Tinto Plc on the grounds that it was disappointed by the company’s approach to diversity on its main board.
There were a total of eight companies in the FTSE 350 with an all-male boards as of May 15, according to Denise Wilson, chief executive of the Hampton Alexander Review, a government-backed initiative aimed at improving gender diversity on the U.K.’s boards. That compares with 13 in October 2016, down from 15 a year earlier.
Several say they plan to add women. Security firm Mitie Group Plc has named Nivedita Krishamurthy, a top executive of Capgemini SA, to the board effective June 1. Publisher Euromoney Institutional Investor Plc is searching for two non-executive directors and “we fully expect that before too long we will no longer have an all-male board,” said Chief Executive Officer Andrew Rashbass. Metro Bank and online gaming operator GVC also said they expect to elect female directors soon.
Others bristle at the suggestion. “Daejan Holdings Plc has no current plans to appoint women to the board,” company secretary Mark Jenner said in an email. The real estate company’s all-male board has an opening for a non-executive director, but “that appointment will be made on merit rather than gender,” he said.