Business Leadership: the Catalyst for Accelerating Change
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BUSINESS LEADERSHIP: THE CATALYST FOR ACCELERATING CHANGE Follow us on twitter @30percentclub Gender balance on teams achieves better outcomes. OUR OBJECTIVES are to achieve 30% women on FTSE 350 boards and 30% women at senior management level of FTSE 100 companies by end 2020. AS CHAIRS, WE HAVE AN OBLIGATION TO SPEED UP THE PACE OF CHANGE AND INFLUENCE THE BOARD SELECTION PROCESS TO TAKE ADVANTAGE OF THE AVAILABLE TALENT POOL. WE MUST CHAMPION DIVERSITY WITHIN OUR OWN ORGANISATIONS, DEVELOP OUR FEMALE TALENT AND BE DEMANDING WITH SEARCH AGENCIES TO ACHIEVE BETTER FEMALE REPRESENTATION ON BOARDS. Sir Win Bischoff, Chair, Financial Reporting Council DIVERSE BOARDS MAKE BETTER COMPANIES. THEY DRIVE UP PROFITABILITY, ENHANCE INNOVATION AND ENSURE STRONGER CORPORATE REPUTATIONS. SHAREHOLDERS ARE INCREASINGLY EXERTING PRESSURE ON COMPANIES THAT ARE SLOW TO IMPROVE. WE ARE PLEASED “TO SEE THINGS ARE MOVING IN THE RIGHT DIRECTION AND WE DO NOT INTEND TO TAKE OUR FOOT OFF THE ACCELERATOR. Brenda Trenowden CBE Global Chair, 30% Club WHO WE ARE LEADERS LEADING BY EXAMPLE We are a group of Chairs and CEOs taking action to increase gender diversity on UK boards and senior management teams. The 30% Club campaign was set up by Dame Helena Morrissey in 2010 with the aim of achieving a minimum of 30% female representation on FTSE 100 boards. That target was reached in September 2018 and good progress has been made (current percentage is 30.5%). But, there is still much more work to do to achieve better gender balance at the top of businesses. Now under Brenda Trenowden’s leadership, our energies are concentrated on supporting more women into senior management roles and taking action to reach our 2020 campaign goals. FTSE 100 CEO MEMBERS Andrew Williams, Halma Aviva** Nigel Wilson, Legal & General Group** Sir Iván Arriagada, Antofagasta Bill Winters, Standard Chartered Bank Keith Barr, InterContinental Hotels Group** Charles Woodburn, BAE Systems Alison Brittain, Whitbread** Lord Stephen Carter, Informa Group** Mike Coupe, Sainsbury FTSE 250 CEO MEMBERS Andrew Croft, St James’s Place Wealth Mgmt Mark Cutifani, Anglo American Alan Aubrey, IP Group John Fallon, Pearson** Lance Batchelor, Saga** John Flint, HSBC Holdings Brian Bickell, Shaftesbury** Liv Garfield, Severn Trent** Philip Bowcock, William Hill Chris Grigg, British Land** Olivier Brousse, John Laing Group Stephen Hester, RSA Insurance Group Stephen Clarke, WH Smith** Chris Hill, Hargreaves Lansdown Luke Ellis, Man Group António Horta-Osório, Lloyds Banking** Rod Flavell, FDM Group** Véronique Laury, Kingfisher** (stepping down 2019) Tristia Harrison, TalkTalk Group** Dave Lewis, Tesco Andrew Horton, Beazley Johan Lundgren, easyJet** Kevin Hostetler, Rotork Andrew Mackenzie, BHP Karen Hubbard, Card Factory** John Martin, Ferguson Alex Kanellis, PZ Cussons** Ross McEwan, RBS** Fani Titi, Investec Ivan Menezes, Diageo** Jonathan Lewis, Capita Steve Mogford, United Utilities Group** Chris Loughlin, Pennon Group Robert Noel, Landsec ** Dame Louise Makin, BTG** BT David Nicol, Brewin Dolphin** Unilever ** John O'Reilly, Rank Group Nick Read, Vodafone Preben Prebensen, Close Brothers Steve Rowe, Marks & Spencer** Andrew Rashbass, Euromoney Inst. Investor David Schwimmer, London Stock Exchange David Squires, Senior plc Keith Skeoch, Standard Life Aberdeen** Jon Stanton, Weir David Sleath, Segro Tobias van der Meer, Hastings Group Holdings** James (Jes) Staley, Barclays Bank Guy Wakeley, Equiniti Group David Stevens CBE, Admiral Group** Roger Whiteside, Greggs** David Thomas, Barratt Developments Emma Walmsley, GlaxoSmithKline** ** 30% or more women at ExCo + direct report levels Source: Hampton-Alexander Review, November 2018 FTSE 100 CHAIR MEMBERS John Allan, Barratt Developments*/ Tesco* John Barton, EasyJet* Charles Berry, Centrica FTSE 250 CHAIR MEMBERS Donald Brydon, Sage* Sir Roger Carr, BAE Systems* Stuart Chambers, Anglo American Charles Berry, Weir Andrew Cosslett, Kingfisher* Stuart Chambers, Travis Perkins Annette Court, Admiral* Roger Devlin, William Hill Ian Davis, Rolls Royce* Andrew Duff, Elementis* Roger Devlin, Persimmon Sir Charles Dunstone, TalkTalk Andrew Duff, Severn Trent* Ian Durant, Greggs* Mike Evans, Just Eat* Douglas Flint, IP Group Douglas Flint, Standard Life Aberdeen Gary Hoffman, Hastings Group* Anita Frew, Croda International* Martin Lamb, Rotork** Sir Peter Gershon, National Grid Paul Lester, Essentra** & McCarthy & Stone John Gildersleeve, British Land (stepping down 2019) Greg Lock, Computacenter (stepping down 2019) Sir Philip Hampton, GlaxoSmithKline* Simon Miller, Brewin Dolphin* (stepping down 2019) Patrick O’Sullivan, Saga* Sir John Kingman, Legal & General Group Sir Ian Powell, Capita Andrew Higginson, WM Morrison Sir John Parker, Pennon Group** Ken Mackenzie, BHP* Sir Nigel Rudd, BBA Aviation*/ Meggitt* Sir Adrian Montague, Aviva* David Tyler, Hammerson* Deanna Oppenheimer, Hargreaves Lansdown* Sidney Taurel, Pearson* * 30% or more women on board José Viñals, Standard Chartered Bank* Source: BoardEx, May 2019 OUR APPROACH THE BUSINESS CASE FOR DIVERSITY IN SENIOR ROLES IS CLEAR The business case is clear – a higher standard of corporate governance, improved financial performance and an enhanced capacity to attract and retain female talent. Diverse teams make better decisions: McKinsey & Company research of 180 publically traded companies found ROEs were 53% higher for companies ranking in the top quartile of executive board diversity than those in the bottom quartile. Similarly Credit Suisse found that companies where women made up at least 15% of senior managers had more than 50% higher profitability than those where female representation was less than 10%. One woman is not enough: 30% is the proportion when the contributions of a member of a minority group are valued in their own right. Research has shown that a critical mass of three or more women can cause a fundamental change in the boardroom and enhance corporate governance. GETTING TO 30% ON FTSE 350 BOARDS AN ACHIEVABLE GOAL Achieving 30% female directors on FTSE 350 boards is within sight. Women currently comprise 26.4% of FTSE 350 board seats and 152 companies have already reached 30%. There are 3 all-male boards, down from 151 in 2010. Meeting this target will require demand by investors, leadership from board chairs, commitment by nominations committees and action from head hunters. It will also require an ongoing investment from CEOs and leadership teams in developing the pipeline of female directors. Percentage of female directorships on FTSE 350 boards 30% 27% 26.4% 24.5% 25% 21.9% 23% 20% 17.4% 14.7% 15% 11.5% 9.5% 10% 5% 0% 2011 2012 2013 2014 2015 2016 2017 2018 2019 GETTING TO 30% AT FTSE 100 SENIOR MANAGEMENT LEVEL THE PIPELINE GOAL Achieving 30% women at senior management level of FTSE 100 companies is also within sight. Women currently comprise 27% at Executive Committee and direct report levels. FTSE100 35 companies have already reached 30% There are 5 all-male Executive Committees Source: Hampton-Alexander Review | FTSE Women Leaders, November 2018 R INVESTOR TOOLKIT STO INVE FOR ENGAGING UP BOARDS ON DIVERSITY RO tent G of In S ent ION m T bers te TA mem Sta EC f our XP half o ate E n be orpor RE ties o on c SU sibili nies able LO spon ompa suit ISC hip re tee c entify D ards inves s to id l stew with use veral gage oard our o ly en the b rt of ctive cess s pa will a pro A , we ng the stee ients cludi inve nd cl es in of an set a issu nding as ance ard. rsta ent and overn e bo unde spar ners ible g for th sive tran ow t ow pons ates rehen to be nd h sse res ndid omp nies ard a As a are ca th a c ompa he bo The 30% Club believes that THE BOARD’S ROLE IN DIVERSIT Y rs we the rs wi ect c for t age p of vesto e exp bers man dshi ide in es, w mem gender balance on boards not ewar on prov polici d new e st ake To rsity to fin Companies that value diversity of thought, and the for th e m dive used , ts w any’s res d. odes only promotes better leadership en ers omp cedu boar ce C so i t d be efi an nga ed hri i g, v vestm mb c e pro erse ernan t as c a e n ts of e g , t v n inno ative in r me ing th a div Gov sity a and governance, but further of ou hat gard ures orate diver alf of t re s ens Corp nt to d and productive workforce, are committed to fostering beh art ces nder itme e an ts. P the at pro ed u omm mak contributes to better all-round clien des th equir e of c e will an environment that enables that diversity to permeate and inclu res r ultur ies w ging ility rds closu of a c nquir enga oard performance, and ultimately nsib boa s dis nce of e it for b and define the culture. This commitment begins at the spo the well a evide types toolk re nt of es. As see f the stor me pani ct to ils o r Inve increased corporate performance. board level – setting the tone from the top – and extends sess com expe deta in ou as tee also rther ned nves at we el. Fu outli throughout all levels of the organisation. ur i s th rd lev k are of o oard e boa ll see ve b gnitiv the e wi boar th t mbrac s i le n governing rsi belie e co res w A d a e e ts ro i dive ty We rac closu y. emb d dis ersit the d cu re hro h t omp ny re ely ste n div s on PURPOSE an ltu t ug ou the c a is mo likely to enuin nife rds o ittee g s ma der boa omm d ity, a gen T tion c e, an accelerate progress and reap the benefits a diverse vers riate EN mina hat w di prop ad M nd no nce t h ap a bro GE airs a porta This toolkit has been developed by the 30% Club workplace can bring.