All-male boards return to FTSE in setback to diversity efforts

The all-male board has made a return to the FTSE, dealing a blow to the efforts of a government-backed campaign to improve gender diversity at the highest levels of British business.

Pizza maker Domino’s appointed a new all-male board at its annual meeting on Wednesday, shortly after carmaker Aston Martin brought in male-only directors at its annual meeting this month.

The Investment Association issued so-called “red tops” — its highest level of warning — to investors over the lack of gender diversity at both Aston Martin and Domino’s, according to people briefed on the matter. The warning from the trade body, which guides investor actions and whose members oversee £7.7tn, highlights the scrutiny by asset managers of companies’ behaviour during the pandemic.

The all-male board had briefly gone out of existence in FTSE 350 companies earlier this year after property company Daejan was taken private — a first in the history of the London Stock Exchange. A decade ago, more than 150 companies had no female board directors.

Aston Martin and Domino’s are now worst for board diversity across the FTSE 350, according to the government-backed Hampton-Alexander review that set the end of 2020 as the deadline for the UK’s largest listed companies to voluntarily appoint women to a third of board positions.

The latest numbers suggest that the target is close to being achieved, with the FTSE 100 on average now meeting the goal at just over 33 per cent and the rest of the FTSE 250 at 32 per cent.

But the aim of the review is that each company in the FTSE 350 has a third or more women on their boards. There are still more than 100 companies across the FTSE 350 that are falling short, including tech group Aveva, betting company Flutter, housebuilder Berkeley, mining group Glencore, Just Eat and the London Stock Exchange, which all have boards where women make up a quarter or fewer of directorships. 

More than 15 companies have representation at or below 25 per cent and therefore “some way to go” in the FTSE 100, according to Denise Wilson, chief executive of the Hampton-Alexander review.

More than 100 companies in the FTSE 250 fall below the 33 per cent target — with about 70 at or below 25 per cent.

Several had reduced the number of women on their boards since the last report in November 2019 and had ignored recent approaches by the review, Ms Wilson said. She expressed concern that progress on gender diversity at board level would slow because of the pandemic.

“There will be a 'cri de coeur' about being busy right now of course but they have had five years,” she said. “There are six months left to get their boards to the 33 per cent minimum target.”

All-male boards should have no place in the FTSE 350 in 2020

Andrew Ninian, director for stewardship and corporate governance at the Investment Association, said asset managers had been clear that, as a minimum, they want to see companies meet the Hampton-Alexander targets for gender diversity.

“All-male boards should have no place in the FTSE 350 in 2020,” he said, adding it was disappointing that some companies are still “[falling] well short of the mark”.

At Aston Martin, chair Penny Hughes left after the January rescue deal led by Canadian billionaire Lawrence Stroll, who became executive chairman, while its two female non-executives did not stand for re-election at the AGM.

Aston Martin said that it was seeking to recruit additional independent non-executive directors. “The board is committed to applying significant focus and effort to board composition,” it said. “This is a particular focus for Mr Stroll as incoming executive chair.”

The board of Domino’s has undergone a near-total overhaul in the past year, with a new chairman and chief executive as well as three new non-executive directors.

The pizza company said: “The board will be working towards improving its diversity, taking into account not only gender and ethnicity, but also the importance of diverse experience and thinking styles.”

Institutional Shareholder Services, an influential shareholder adviser, also flagged the lack of diversity at Domino’s in a report for shareholders. Rival adviser Glass Lewis said it was concerned about the lack of female board directors at Aston Martin and Domino’s.

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