United Kingdom

Jenna McGrath, Associate
Paul Hastings (Washington, DC)

In the United Kingdom, Financial Times Stock Exchange (FTSE)1 index companies have made significant improvements toward achieving gender equality on corporate boards, particularly in the FTSE 100. 

For over 20 years, Cranfield School of Management has collected data on board gender equality of FTSE listed companies and issued an annual report (“Cranfield Report”).  According to Cranfield, the percentage of female held directorships on FTSE 100 boards rose to 27.7% in 20172 (compared with 10.5% in 20053 and 12.5% in 20104), and 9.8% of executive directorships were women, with six women holding chair positions.5  The percentage of female held directorships on FTSE 100 boards increased to 29% in 2018, with a significant increase in the number of women holding non-executive director positions (35.4%).6 

While the percentage of women on boards within the FTSE 100 has increased dramatically since 2010, FTSE 250 companies have not been keeping pace.  Between 2017 and 2018, the percentage of women on boards of FTSE 250 companies increased by less than 1%, from 22.8% to 23.7%.7  The FTSE 250 has slowed growth and even dropped by other metrics that measure gender equality.8  For example, in the FTSE 250, the percentage of female held executive directorships decreased from 7.7% in 2017 to 6.4% in 2018 (from 38 directors in 2017 to 30 directors in 2018).9  This suggests a disconnect among efforts between the top 100 companies and those that fall below.

UK Initiatives to Promote Gender Diversity on Boards

In February 2011, Business Minister Lord Davies commissioned a report on the gender imbalance on corporate boards (the “Davies Report”) which found that FTSE 100 boards were only comprised of 12.5% women directors at the time.10  The Davies Report noted that at the then-current rate of improvement it would take 70 years to achieve gender equality on the boards of UK companies.11  The Davies Report stated that women often succeed early in their careers, “but attrition rates increase as they progress through an organisation.”12  It also emphasized the business case for incorporating more women on boards, citing studies that greater gender diversity correlated with better performance.13

The report did not just collect statistics, but aimed to provide actionable solutions and goals for companies to do better.  Specifically, the Davies Report set the following goals:14

  1. By September 2011, chairmen of FTSE 350 companies should announce goals of the percentage of women they intend to include on boards in 2013 and 2015, specifying that FTSE 100 boards should set a goal of minimum 25% female representation by 2015. 
  2. There should be requirements for quoted companies to make public their proportion of women in senior executive positions, women employees, and women on their boards.
  3. The Financial Reporting Council should revise the UK Corporate Governance Code to add requirements for listed companies to establish a board diversity policy.
  4. Even if regulations have not been revised, companies should report on the matters above in their 2012 Corporate Governance Statements.
  5. Pursuant to the UK Corporate Governance Code, annual reports should include information about processes for board appointment and how they address diversity.
  6. Investors should consider the above recommendations in board appointments and reporting.
  7. Companies should advertise for non-executive positions on the board to facilitate a diverse pool of applicants.
  8. A voluntary code of conduct for executive search firms should be drafted to address diversity and related search criteria.
  9. Individuals and companies should develop the following groups of women qualified to sit on boards: a) women from within the corporate mainstream with access to training opportunities, and b) women outside the corporate sector, “including entrepreneurs, academics, civil servants and senior women with professional backgrounds, for whom there are many fewer opportunities to take up corporate board positions.”15
  10. Further meetings of the steering board should be held to assess the success of these recommendations.

Though Lord Davies did not support a quota system, the report stated that “more prescriptive” methods may be necessary if “the business-led approach does not achieve significant change.”16  The report emphasized the need for cooperation across sectors, including corporations, executive search firms, and government.17

In October 2015, Cranfield in coordination with the UK government released a five-year review of the Davies recommendations (the “Cranfield Review”).  The Cranfield Review noted that the presence of women on FTSE boards more than doubled since 2011—with 26.1% on FTSE 100 boards and 19.6% on FTSE 250 boards as of October 2015.18  FTSE 100 boards had not only achieved, but had exceeded, the 25% goal set forth in the Davies Report—a milestone acknowledged by then-Prime Minister David Cameron.19  It also noted a significant reduction in the number of all-male boards—152 in 2011, with no all-male boards in the FTSE 100 and only 15 in the FTSE 250 as of the date of the Review.20  The Cranfield Review credits this progress to communicating the business case for board diversity, proposing a voluntary approach with defined targets and engaging key stakeholders.21 

The Cranfield Review recommended five next steps:

  1. Maintain a voluntary business-led approach for a further five-year period.
  2. Raise the voluntary target for Boards of FTSE 350 companies to a minimum of 33% female representation within five years, with all FTSE listed companies assessing the gender balance on their Boards and taking action on any shortfall.
  3. Extend the best practice seen at the board level to improve gender balance and look to fundamentally improve the representation of women on Executive Committees and senior-most leadership positions.
  4. Develop an independent steering body comprised of business and subject matter experts to maintain and monitor progress, reporting periodically.
  5. Have the steering body review the above four recommendations in consultation with stakeholders and develop further detailed comments.22

The Hampton-Alexander Review on FTSE Women Leaders , commissioned by the UK Government and first published in November of 2016, builds on the progress achieved under the Davies Report by soliciting voluntary self-reported information from FTSE companies and providing annual progress reports on gender diversity in the FTSE 350.   It develops recommendations for advancing gender diversity on corporate boards and sets new goals for women’s representation in corporate leadership.  It also goes beyond the Davies Report in “extending the scope to include FTSE 350 Executive Committees and the Direct Reports to the Executive Committees.”23 

The Hampton-Alexander Review introduced a new target of 33% women in FTSE 100 leadership teams (going beyond the 2015 Davies recommendation by including executive committees and their direct reports in this target) and 33% women on FTSE 350 boards by 2020.24  The Hampton-Alexander Review provided a “How-To” guide for companies to reference in pursuing these targets, which included information on assessing an organization’s leadership pipeline, establishing the business case for gender diversity in leadership within the organization, and measuring progress.25  Despite some slowed progress in the 12 months leading up to the Report,26 it continued to support the voluntary-business led approach established in the Davies Report.27

The Hampton Alexander Review: 2017 (“2017 Review”) introduced the additional goal of extending the 33% target for women in leadership to FTSE 250 companies (from the FTSE 100 set in 2016).28 Though the 2017 Review reported only nominal progress in women’s representation in corporate leadership (e.g., women were 25.1% of executive committees and their direct reports in 2016 and 25.2% in 2017), it noted improvements in participation of companies in the Review’s voluntary data collection, including a number of companies that were collecting gender diversity data for the first time—itself an accomplishment.29  It also named companies that did not provide information to the Review, encouraging them to participate in the future, and profiled companies that had made significant progress.30 The 2017 Review reported that the rate of progress was picking back up, with women’s representation on boards at 27.7% among the FTSE 100, 22.8% in the FTSE 250, and 24.5% in the FTSE 350.31

The Cranfield 2018 Report estimates that the UK is on-track to meet the Cranfield Review’s 33% target for women in the FTSE 100, and 32 of the FTSE 100 have already reached a target of 33% within their organizations.32  However, Cranfield suggests that, due in part to a lack of accountability in management and lack of meaningful developmental opportunities for women, the FSTE 250 and 350 have lagged notably behind the FTSE 100.  For example, in 2018, there was an increase of all-male boards of FTSE 250 companies to ten and a decrease in female executive directors (7.7% to 6.4%) from 2017.33

Voluntary Code of Executive Search Firms

In response to the Davies Report, in 2011 20 top UK executive search firms announced a new voluntary code of conduct (the “Code”), which has been revised over the years.  In 2014, the UK instituted an accreditation process and related criteria to recognize those search firms that have successfully implemented the Code, and those that work with corporations outside of the FTSE-350 to voluntarily adopt practices to promote diversity.34 

The most current version available of the Code sets out the following key principles of best practices:

UK Government Laws and Intervention

The United Kingdom Financial Reporting Council (FRC) regulates corporate governance and reporting, and has established a Corporate Governance Code (“FRC Code”) that “sets standards of good practice in relation to board leadership and effectiveness, remuneration, accountability and relations with shareholders.”36   The latest version of the FRC Code, to become effective in 2019, advances a number of principles and related procedures to promote diversity on boards, including that the annual report should include a company’s “policy on diversity and inclusion.”37  For example, board appointments should, in addition to considering merit-based criteria, “promote diversity of gender…,” and each company should prepare annually an evaluation of its diversity.38

Regulations enacted in 2013 under the Companies Act 2006 (Strategic Report and Directors’ Report) introduced new reporting requirements intended to collect data on gender equality in workplace leadership, to provide transparency and hold companies responsible for their progress. The regulations “require all quoted companies to include, as part of their strategic report, a breakdown showing: the number of persons of each sex who were directors of the company; the number of persons of each sex who were senior managers of the company; and the number of persons of each sex who were employees of the company.”39

In addition to initiatives specifically aimed at women in the workplace, the UK also has general legal protections that may be utilized to thwart discrimination in the workplace. The Equality Act of 2010 makes it unlawful to discriminate against people who are or wish to become office holders on the basis of sex or maternity.

London Stock Exchange

The LSE does not enforce any independent mandatory diversity requirements as a condition of listing,40  but has informally endorsed diversity policies and voluntary compliance with the FRC Code which, as discussed above, includes recommendations on the development and reporting of board appointment policies. Referencing the Davies Report, the LSE’s 2012 report on corporate governance recognized with respect to effective board structure that “diversity is now commonly agreed to be a characteristic of effective boards” to ensure a range of skills and to avoid “group think” within the board.41  The London Stock Exchange Group (“LSE Group”), which operates the LSE, issued its first “UK Gender Pay Gap Report” in 2018, affirming its commitment “to improving diversity and inclusion, not only within the LSE Group, but across the financial services industry and in the communities” in which it operates.42  This report outlined the LSE Group’s efforts to address the gender pay gap, including its establishment of a Diversity and Inclusion Committee and signing the Treasury’s Women in Finance charter, which sets a goal of 40% female representation by 2020.43  In addition, companies with “Premium Listing” shares must include an explanation of how they have complied with the FRC Code, including with respect to board diversity policies and reporting in their annual reports pursuant to the Listing Rules of the Financial Conduct Authority.44  Premium Listings are generally expected to maintain a higher standard of corporate governance than Standard Listings, which may boost investor confidence and lead to a lower cost of capital.45 

Private Sector Gender Diversity Initiatives

In May 2010, in response to the Davies Report and the reality that very few women were making it into top positions at UK corporations, Helena Morrissey (the then-CEO of Newton Investment Management) and Labour peer Mary Goudie formed the 30 Percent Club to galvanize the business community into action. The 30 Percent Club and its member corporations work with company board chairs to appoint more women to their boards; assist companies in trying to improve their diversity and with women seeking board appointments; liaise with related groups, including executive search firms, to improve boardroom diversity; influence the political agenda and garner increased media coverage; and track progress toward the 30% goal.46 

Since its launch in the UK, the 30 Percent Club has established chapters in 11 countries and has launched the “Future Boards Scheme”—a program aimed a FTSE 350 companies designed to get participants the board experience necessary to advance their careers, providing some participants 12 months of experience on a major board.47  The Department for Business, Energy and Industrial Strategy, in conjunction with UK Government Investments is actively participating in the Future Boards Scheme.48

UK Initiatives Addressing Ethnic Diversity

The UK’s laws provide protection to diverse groups from discrimination on a number of protected characteristics, including age; disability; gender reassignment; race; religion or belief; sex; sexual orientation; marriage and civil partnership.49

To advance ethnic diversity, the government has provided support to the Parker Review Committee, a business-driven review chaired by Sir John Parker, a well-known British businessman.  Created in 2015, the Parker Review Committee addresses the obstacles to ethnic and cultural diversity among the largest British companies.  In 2017, after extensive review and data collection, the Parker Review Committee issued its Final Report50 urging business leaders to improve the ethnic and cultural diversity of UK Boards to better reflect their employee base and the communities they serve.  The report found some remarkable statistics about a startling lack of ethno-cultural diversity among Britain’s largest companies.  An examination of the FTSE 100 revealed that out of 1,050 director positions:

The report set forth the following targets with recommendations to accomplish each one: 1) have at least one director from an ethnic minority background by 2021 for the FTSE 100 and for each FTSE 250 Board to do the same by 2024, 2) develop mentoring and succession programs to develop diverse candidates, and 3) enhance transparency and disclosure to record and track progress.52 

Former UK Business Secretary Sajid Javid commissioned Baroness Ruby McGregor-Smith to prepare a report reviewing obstacles to Black or Minority Ethnic (BME) talent and provide recommendations (the “Baroness McGregor-Smith Report”).  The Baroness McGregor-Smith Report produced a wealth of data supporting the same types of conclusions as the Parker Report: that diversity is woefully lacking on UK’s corporate boards.53 

The Baroness McGregor-Smith Report set forth 26 recommendations for the government to advance opportunities in the workplace for ethnic minorities.  The recommendations included: government support to encourage or require opportunities for unconscious bias training across all levels of an organization; formal mentorship programs and networking; diversity policies; diverse interview panels; and published goal setting.54  The government issued an official response reacting positively to the recommendations, but for the most part, placed the onus on businesses to advance workplace diversity.55  The official response described its support to ensure companies devote resources toward diversity programs, further voluntary business-led efforts to enhance transparency, and promote the business case for diversity and inclusion programs.56


The UK has made substantial progress toward gender diversity on boards, particularly among the UK’s largest companies, but less so among the FTSE 350.  The UK also struggles with racial and ethnic diversity on boards and in the workplace generally, and resources have only recently been devoted to advance ethnic diversity in the private sector.  Given that the Baroness-McGregor-Smith Report’s targets and recommendations were only published in 2017, it remains to be seen whether the UK will witness similar progress for ethnic diversity as it has seen for gender diversity.

1  The FTSE is a subsidiary of the London Stock Exchange (LSE) that ranks companies by market value.

2  The Female FTSE Board Report 2017, Cranfield Univ. Sch. of Mgmt. 1 (2017),   https://www.cranfield.ac.uk/som/expertise/changing-world-of-work/gender-and-leadership/female-ftse-index (hereinafter “Cranfield Report 2017”).

3  The Female FTSE Board Report (2005), Cranfield Univ. Sch. of Mgmt. 4 (2005).

4  The Female FTSE Board Report (2010), Cranfield Univ. Sch. of Mgmt. 8 (2010).

5  Cranfield Report 2017, supra note 2.

6  The Female FTSE Board Report 2018, Cranfield Univ. Sch. of Mgmt. 7 (2018), https://www.cranfield.ac.uk/som/expertise/changing-world-of-work/gender-and-leadership/female-ftse-index (hereinafter “Cranfield Report 2018”).

7  Id.

8  Id. at 7-8.

9  Id. at 7.

10  Independent Review into Women on Boards, Dep’t for Bus., Innovation, & Skills 3 (Feb. 2011), https://www.gov.uk/government/news/women-on-boards.

11  Id.

12  Id.

13  Id.

14  Id. at 4-5.

15  Id. at 5.

16  Id. at 2.

17  Id. at 3.

18  Improving the Gender Balance on British Boards, Women on Boards Davies Review – Five Year Summary 34 (Oct. 2015), https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/482059/BIS-15-585-women-on-boards-davies-review-5-year-summary-october-2015.pdf (hereinafter “Cranfield Review”).

19  Influencing national policy on gender diversity on top corporate boards, Cranfield Univ. Sch. of Mgmt., https://www.cranfield.ac.uk/som/case-studies/women-on-boards-ftse-research (last visited Aug. 27, 2018).

20  Cranfield Review, supra note 8, at 6.

21  Id. at 9-14.

22  Id. at 7.

23  Improving gender balance in FTSE Leadership, Hampton-Alexander Review: FTSE Women Leaders 8 (Nov. 2016), https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/613085/ftse-women-leaders-hampton-alexander-review.pdf.

24  Id. at 5.

25  Id. at 16-17.

26  Id. at 32.

27  Id. at 2.

28  Improving gender balance in FTSE Leadership, Hampton-Alexander Review: FTSE Women Leaders 8 (Nov. 2017), https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/658126/Hampton_Alexander_Review_report_FINAL_8.11.17.pdf.

29  Id.

30  Id. at 16-19.

31  Id. at 23-25.

32 Cranfield Report 2018, supra note 6.

33  Id.

34  Voluntary Code of Conduct for Executive Search Firms (Nov. 2017), https://ftsewomenleaders.com/wp-content/uploads/2015/07/VOLUNTARY-CODE-OF-CONDUCT-FOR-SEARCH-FIRMS-NOVEMBER-2017.pdf.

35  Id.

36  UK Corporate Governance Code, Fin. Reporting Couns., https://www.frc.org.uk/directors/corporate-governance-and-stewardship/uk-corporate-governance-code (last visited Sept. 14, 2018).

37  UK Corporate Governance Code, Fin. Reporting Couns. 9 (Jul. 2018), https://www.frc.org.uk/getattachment/88bd8c45-50ea-4841-95b0-d2f4f48069a2/2018-UK-Corporate-Governance-Code-FINAL.pdf.

38  Id. at 8.

39  Id. (citing The Companies Act 2006 (Strategic Report and Directors’ Report) Regulations 2013 No. 1970 (internal citations omitted)), https://www.legislation.gov.uk/uksi/2013/1970/contents/made.

40  London Stock Exchange Admission and Disclosure Standards, London Stock Exchange, (Oct. 1, 2018), https://www.londonstockexchange.com/companies-and-advisors/main-market/documents/admission-and-disclosure-standards-new2018.pdf.

41  Corporate Governance: For Main Market and AIM Companies, London Stock Exchange, 69 (2012).

42  UK Gender Pay Gap Report, London Stock Exchange Group, 1 (Mar. 2018), https://www.lseg.com/sites/default/files/content/documents/CR_documents/2018/LSEG_UK_Gender_Pay_Gap_Report.pdf.

43 Id., at 3

44 UK Corporate Governance Code, Fin. Reporting Couns., https://www.frc.org.uk/directors/corporate-governance-and-stewardship/uk-corporate-governance-code (last visited Sept. 14, 2018). See FCA Handbook, Fin. Conduct Auth., https://www.handbook.fca.org.uk/handbook/LR/1/?view=chapter

45  Listing Regime, London Stock Exchange, https://www.londonstockexchange.com/companies-and-advisors/main-market/companies/primary-and-secondary-listing/listing-categories.htm (last visited Oct. 1, 2018).

46  See 30% Club,www.30percentclub.org.uk (last visited Aug. 27, 2018).

47  The Future Boards Scheme, 30% Club, https://30percentclub.org/initiatives/the-future-boards-scheme (last visited Aug. 27, 2018).

48  Corporate governance reform: The Government response to the green paper consultation, Dep’t Bus., Energy & Indus. Strategy 49 (Aug. 2017) https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/640631/corporate-governance-reform-government-response.pdf.

49 See Discrimination: your rights, https://www.gov.uk/discrimination-your-rights (last visited Sept. 14, 2018).

50 A Report into the Ethnic Diversity of UK Boards, Sir John Parker: The Parker Review Committee (Oct. 12, 2017), https://www.ey.com/Publication/vwLUAssets/The_Parker_Review/$FILE/EY-Parker-Review-2017-FINAL%20REPORT.pdf.

51  Id. at 7.

52  Id. at 11.

53  Race in the Workplace: The McGregor-Smith Review (Feb. 2017), https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/594336/race-in-workplace-mcgregor-smith-review.pdf.

54  Id. at 32.

55  Government Response to Baroness McGregor Smith, Dep’t Bus., Energy & Indus. Strategy, https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/594365/race-in-workplace-mcgregor-smith-review-response.pdf.

56  Id.