Women in Business Updates
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British businesses will come under new pressure to appoint more women to senior leadership positions, while ministers prepare to begin the Hampton Alexander equality review again this year.
The five years Review of Hampton Alexander came to an end in February after a final report showed that the goal of a third of women in board positions was reached on average over the FTSE 350.
Ministers are now drafting proposals with the review’s management team to get a new push to ensure UK businesses have at least 40 per cent female board directors.
The new plans form part of a larger effort by regulators to encourage businesses to strive for equality in senior leadership positions. The FCA also said last week that it would encourage companies to have a minimum of 40 percent of women on their board in a consultation document.
The power of the review is expected to be extended to large unlisted companies to encourage a more widespread gender balance in UK affairs, as well as to senior leadership positions outside the council chamber, according to people familiar with the plans.
The UK government will start looking for new chairs for the program, which is expected to continue under the formal title of the scheme – the FTSE Women Leaders Review. Sir Philip Hampton stepped down as chairman in February and Dame Helen Alexander passed away in 2017.
A person close to the review said there was much more to be done before women were equally represented in British affairs. More than 100 FTSE 350 companies have still not reached the 33 percent target, with only a single woman on about 16 boards.
‘A third is not gender equality. Why should we stop there and not strive for proper equality in the council chamber? Investors want companies to increase the pace as well, ”the person said.
In a joint letter from Kwasi Kwarteng, Minister of Affairs, and Liz Truss, Minister of Women and Equality, through the Financial Times, officials said that officials had considered proposals and that they had reached the same conclusions as those of the management team behind the review.
The letter was sent last week to the head of the review, Denise Wilson, and his independent steering group, which includes executives from Tesco, KPMG and Lloyds.
It is said that the review ‘should strive for a 40:40:20 gender equality measure’ achieved through equitable recruitment.
‘Instead of drawing up a precise balance at all times, this measure will be a guideline so that no gender is seriously over-represented (more than 60%) or under-represented (less than 40%) in management and senior leadership level. ”
The letter points to research that shows that businesses that approach this relationship are more profitable. “As such, they can also recover more quickly from the impact of the pandemic,” Kwarteng and Truss wrote.
A separate letter was sent to the FTSE CEO of the business department and the review states that “ministers … and the steering group are completing the next phase of this review”.
Companies have been informed that the data collection process will continue as before, including the number of men and women in the executive committees of the enterprise and direct reports to executive committees.
Officials want the review to examine the key role of decision-making, such as chief financial officer and chairman, “which should no longer remain an exclusively male domain in any business”, reads the letter from Kwarteng and Truss.
Both ministers also support plans to invite the largest non-listed companies to report on progress in achieving these goals. “Expanding the scope of the review will ensure a greater regional and socio-economic reach if we follow female representation in a larger part of the workforce,” the letter reads.
However, private companies are already worried about the amount of new regulations they are facing under the upcoming audit reforms, which will make managers worried that their costs and paperwork will contribute to their operations.
The business division said that ‘there is still a way to go, so we encourage businesses to do more to accelerate progress towards more inclusive and diverse workplaces’.