Research: NED Gender Disparity in AIM and FTSE 100 Listed Companies

January 25, 2021


The Board oversees all strategic decisions within a company – it makes sense then for it to be composed of a diverse and representative range of individuals.

Given that it can be a simpler process to find and appoint Non-Executive Directors (NEDs) compared to Executives Directors, there is seemingly an opportunity for companies to use NED appointments to achieve higher levels of diversity.  One such diversity being in respect of gender.

MM&K Analysis

Numerous historical studies have shown there are greater numbers of men than women NEDs in the UK and, despite gains being made in this area, this trend is still continuing.

As an exercise, focusing on three important sectors of the economy, we were interested to see if this trend was different depending on where the business was listed.

For the purpose of this research, MM&K analysed the boardroom’s gender composition comparing new AIM companies, listed after January 2020, to some FTSE 100 companies in the same sectors.

We took a deep dive to look at three specific sectors: Financial Services, Oil & Gas and Technology.

The initial analysis clearly shows a collective difference. Among the newly listed AIM companies, 88% of roles are filled by males, compared to 12% by females, while in the FTSE 100, 56% of the roles are held by males, compared to 44% by females.

As shown in the graphs, there is a substantial percentage disparity between the new AIM companies and the FTSE 100 companies analysed. In particular, it can be noticed that the Financial Services sector, brings down the percentage across the AIM companies, while in the FTSE 100 companies, the percentage of female NEDs appointed shows a higher degree of consistency across all sectors.

It is surprising that Financial Services companies in the new AIM listed companies had no female NED’s at all.

However, the Financial Times has recently reported that the UK is struggling in finding females to cover senior positions in the Financial sector.

Due to this shortage, it is possible that senior females in this sector might lean more towards bigger companies (with likely larger reward opportunities), leaving AIM companies in need of female representation. This could go some way to provide a reason for the figures above.

However, it is also possible that lighter regulation and focus on diversity on AIM might mean that companies simply decide it is easier in the short term to go with all male NEDs.  If this is the case, then it might be necessary to extend guidelines, like those in the FTSE, down into AIM to help improve this situation.

In our view, whilst it is paramount to consider the best candidate for the position, based on skills and experience, the additional effort to make sure that the Board is diverse (however that might be measured) should be one of the key criteria for companies to consider when making decisions about Board composition.

Please contact Elisa Cobetto for any queries.

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