Executive Search Firms
The executive search community got together in 2011 and drew up their own Voluntary Code of Conduct to support their clients in improving the gender balance on their boards. Over 50 firms are now signatories to the standard Code of Conduct.
The Enhanced Code of Conduct requires a more exacting standard of best practice on gender equal selection. Accreditation under the Code is performance/output based, as well as qualitative. It acknowledges those firms at the forefront of helping boards enhance their gender balance, with a strong track record in promoting gender diversity in the FTSE 350 and having done much to fuel the progress towards 33% on FTSE 350 boards.
Accredited firms are required to have demonstrated the following in the last 12 months:
- At least 40% of their FTSE 350 board appointments have been to women
- To have supported the appointment of at least 4 women to FTSE 350 boards
- To have a proven record of helping women to achieve their first board appointment.
Congratulations to the 10 Executive Search Firms that have qualified this year under the Enhanced Code of Conduct. These are the firms in the UK who are currently appointing more women than most to British boards and working hard to shift gender balance at the top.
Enhanced Code Accredited Firms
|FTSE 350||Beyond FTSE 350|
|Egon Zehnder||Fidelio Partners|
|Heidrick & Struggles||Green Park|
|The Inzito Partnership||Norman Broadbent|
|Korn Ferry||Warren Partners|
The Executive Search community needs to be commended for working together and in support of their clients to achieve greater gender-balance on boards, at the same time as raising the bar on themselves. They have collectively been a major driver of progress.
The current added-value opportunity for search firms is to repeat this success in building gender-balance in the Executive Committees and senior leadership roles. With 50% of all available appointments needing to go to women to achieve the 33% target by the end of 2020, those firms showing the greatest appetite for innovation, those producing gender balanced short lists and actively supporting the appointment of capable women, are those firms most likely to achieve the greatest competitive advantage.
Russell Reynolds Associates
“Despite the competitive nature of the sector, the Executive Search community has worked together, not only to establish a ‘code of conduct’ around gender diversity, but to ensure that words are put into action. This substantial shift in the proportion of women on boards is testament to this combined effort. Now we all recognise that there is more to be done on the executive pipeline.”
“Diversity is high up investors agenda and shows no sign of going away. Our commitment to invest in diverse and better run companies filters through in our engagement with management, our voting behaviour
and our investment decisions. We are convinced that companies who take this seriously and pro-actively secure a diverse pipeline of talent, will make better decisions now and in the future, to the benefit of our clients.”
Global Head of Stewardship, Schroders Plc
Investors view diversity as a core and critical business issue that boards and leadership teams must address to secure their long-term success. They continue to look closely at companies’ approach to diversity and inclusion as a key ingredient of effective governance.
Investors know that when companies bring a diverse mix of perspective and skills to the table this will lead to greater productivity and sustainability. This is not simply a question of fairness. These companies will be better equipped to foresee and act on risks and opportunities, nurture talent and command the trust of the consumers they serve – delivering better long-term returns for investors on behalf of savers.
Voting against Directors over diversity concerns: The Investment Association’s Public Register records all companies that have received high votes against (of 20% or more) resolutions at their AGMs in one place and highlights the major issues that investors are using their voting power on, offering a place to set out steps taken to engage with their shareholders and address concerns.
In 2019, 30 companies Nomination Committee Chairs and 30 Board Chairs have featured on the Investment Association’s Public Register, having experienced significant shareholder dissent. Investors are poised to hold these individuals responsible for ensuring the board is governed well and are prioritising diversity.
“Hampton-Alexander has been a trailblazer. It has made companies consider how they can better reflect their workforce and the communities they serve. Its approach has rightly been replicated to encourage greater ethnic diversity on UK boards through the Parker Review.”
CEO, The Investment Association
Calling out ‘One & Done’ Boards: In March 2019, the IA and the Hampton-Alexander Review team wrote letters to 66 “One & Done”companies in the FTSE 350 who had only one woman on the board and to three companies with All-Male Boards; reinforcing investors’ view that companies must do more than take the tokenistic step of appointing just one woman to their board and considering that ‘job done’. The 69 companies were asked to outline what action they were taking to make progress and ensure they are meeting the Hampton-Alexander targets of 33% of women on their board and leaderships teams by 2020.
In response, half of the companies have appointed at least one additional women to their board since March 2019. There were 48 companies who replied recognising the benefits of diversity in business and confirming they were committed to achieving the target either by 2020 or in the near future. This welcome progress demonstrates that UK companies are finally taking diversity seriously and are beginning to grasp the huge opportunity of a representative workforce. However in November 2019, 28 of these companies remain at “One & Done” having made no progress in the year.
In the Media
Women must make up one-third of senior directors by 2020,
Companies must do more than take the tokenistic step of appointing just one woman to their board and consider that job done
FTSE 350 firms under fire over ‘unacceptable’ lack of female directors
Investor group urges listed firms with only one woman on board to address diversity targets
Scores of ‘out of touch’ FTSE bosses told off for lack of women on boards
Scores of Britain’s biggest businesses have been named and shamed for their failure to appoint enough women to their boards.
“The power of investor capital is making its mark, as diversity emerges as an economic and strategic imperative. We’ve seen a substantial change in terms of engagement, with diversity a regular feature and company leaders actively approaching investors to explain how they are addressing gender imbalance in the workplace. This is signifcant, as CEO commitment is a key game changer.”
Deborah Gilshan & Clare Payn
Co-Chairs, 30% Club Investor Group
The Hampton-Alexander Review is particularly grateful to institutional investors for their recognition of the importance of boardroom diversity in delivering long-term sustainable returns and the strong support of the Investment Association, the Investor Forum and the 30% Club Investor Group.