Large firms lacking board level diversity risk ‘toxic’ cultures, group warns
The UK’s biggest listed companies lack employee representation and gender diversity at executive board level, Women on Boards found.
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Your support makes all the difference.Companies need more diverse boardrooms to crack down on toxic cultures within their workplace, amid scandals hitting major businesses like the Confederation of British Industry (CBI), the head of a leading diversity advocacy group has said.
The UK’s biggest listed companies lack employee representation and gender diversity at executive board level, Women on Boards found.
Just three out of the 585 companies listed on the FTSE All-Share have a chief people officer sitting on executive board seats and six have an employee representative, according to the analysis.
This lack of representation is posing a “huge business risk” for firms who may be unaware or failing to address a toxic work culture, Fiona Hathorn, chief executive and co-founder of Women on Boards, said.
Ms Hathorn told the PA news agency that foregoing good culture is “wiping companies’ share prices and the value of their brand and their business overnight”.
Companies really need to think of how they get the voice of the employee in the boardroom
It comes as a number of companies have made the headlines in recent months over allegations of misconduct or a bad workplace culture.
The CBI lost a number of fee-paying members and was forced to overhaul the business following allegations of sexual harassment and assault within the group. It hired a chief people officer following the scandal to help lead cultural change.
ITV has been forced to deny allegations of a toxic culture at programme This Morning following the resignation of former host Phillip Schofield.
Furthermore, hedge fund Odey Asset Management has faced turmoil over the past week following fresh sexual misconduct allegations against its founder Crispin Odey.
Ms Hathorn said companies should not “turn a blind eye” to the behaviour of its “revenue earners”, nor should they wait for employees to speak out before addressing poor culture.
She told PA: “Out of 4,800 board seats across the FTSE All-Share, we were shocked to find that only 2.3% were not the chief executive officer (CEO), the chief financial officer (CFO), or the company secretary.
“So that is a very, very loud voice from either the financial side or possibly a dominant CEO in the boardroom.
“Companies really need to think of how they get the voice of the employee in the boardroom.”
She added that employees are “more empowered than ever” and that firms are facing a rise in workplace activism if they do not listen to staff.
Hollywood Bowl, Halma and Intermediate Capital Group were the only FTSE-listed companies identified by the analysis to have a chief people officer on their executive board.
Meanwhile, housing provider Mears Group and manufacturer Essentra were among a handful of firms to have an employee or an employee representative on the executive board, which Ms Hathorn said helps businesses be more informed about cultural issues at a top level.
Nevertheless, London-listed firms have made progress on improving gender diversity at board level, the research found.
The number of women on FTSE All-Share boards rose to 40% this year and there are no companies on the FTSE 100 or FTSE 250 with all-male boards.
However, excluding company secretary, only 10% of executive board directors are women, the analysis highlighted.
It indicates that top jobs like CEO and CFO remain male-dominated, with most progress on gender diversity being made through non-executive board appointments.