Two companies heading towards flotations in London worth billions of pounds face pressure over a lack of female representation on their boards following criticism from the peer behind a drive to improve the gender balance in boardrooms.
Lord Davies, who oversaw the coalition government’s initiative to increase the participation of women on boards, said investors should “take into account” the all-male boards of insurer Hastings and payment processing company Worldpay before deciding whether to back the floats.
Neither Hastings, which is preparing for a £1.5bn flotation, nor Worldpay, which could be valued at £3.5bn when it floats, have any female representation at the highest level. This is despite corporate governance guidelines suggesting they select directors from the widest possible pool of talent.
Davies described the situation as disappointing and said he was sure investors would take it into account when thinking of whether to invest or not.
The peer said he was surprised that shareholders in Hastings and Worldpay had not raised the women issue as one of major concern. Hastings is controlled by Goldman Sachs and the insurance entrepreneur Neil Utley and other founders, while private equity firms Bain Capital and Advent control Worldpay.
“It’s very disappointing in the current climate,” said Davies. Women now hold 23.5% of directorships in the FTSE 100 stock market index, close to the Davies target of 25%. “We have made so much progress and have gone from a point where 21 FTSE 100 companies had no women on their board to none, showing that self-regulation can work,” he added.
Referring to the lack of a female presence on the Hastings and Worldpay boards, Katushka Giltsoff of the Miles Partnership, an executive search group, said: “When you see things like this it makes you put your hands up in the air and say how nothing has changed.”
She added: “There are plenty of women who could have stepped onto an insurance company’s board. There needs to be a dialogue going so that investment bankers challenge the status quo. “
Female boardroom representation in FTSE 100 companies may is increasing but it is far lower in companies that are joining the stock market. According to data collected by Financial News, only 11.5% of the directors of companies floated in London in 2013 were women. The figure nudged up, but only slightly, to 13.6% in 2014.
Gay Collins, a founder member of the steering committee the 30% Club, which aims to increase representation of women on UK boards to at least 30%, said: “You’d have thought that a flotation would be the perfect time to get the board structure fit for purpose for the future, but the reality is that it’s often done in a rush, without using headhunters and through contacts of the advisers or the company.”
Hastings’s chief executive Gary Hoffman, the former chief executive of Northern Rock, said he tried hard to have as diverse a board as possible. “We interviewed quite a few women, ones who were plc or industry ready, but the ones we wanted were either too busy or conflicted. We could easily have ticked all the boxes to avoid press and corporate governance criticism but we’re still interviewing and we might get somebody quite soon.”
Hoffman, who has worked for Barclays and Northern Rock, said he has always been a diversity champion, whether of gender or ethnicity.
He has pledged that within 12 months the company will be compliant with the corporate governance code, having a higher proportion of independent directors as well as at least one woman on board.
One advisor on the Hastings float, which is set to go ahead in the next few weeks, said he had raised the issue of female representation. “I knew this would be an issue,” he said.
The group points out that two female board members, Clare Ryder and Selina Sagayam, already sit on the company’s subsidiary board. Some well-known business-women, including Kathleen O’Donovan, a director of a number of companies, and Anne Godbehere, a director at Prudential, were sounded out for board positions with Hastings but turned them down.
Goldman sources said that the Wall Street bank’s private equity arm, which holds the Hastings investment, was committed to having women on the company’s board and that the process to do this had started.
Some say that the lack of priority given to boardroom gender diversity in companies heading for the stock market is letting down the considerable progress among companies that are already listed.
The expectation at Worldpay, which decided on Friday to press ahead with aflotation, is that it will hire further non-executive directors and will aim to add female representation to its board within weeks. “We’re in advanced discussions with a female candidate and hope to have her on board by the time the prospectus is filed,” one source said.
Giltsoff said that women still fared badly in UK boardrooms outside the FTSE 100.
“If you drop below the FTSE 100 a lot of companies are resistant to change and in some FTSE 250 companies there is blatant sexism.” She said the 30% club had struggled to get support from the chairs of a number of FTSE 250 companies.
This article was written by David Hellier, for theguardian.com on Sunday 20th September 2015 17.30 Europe/Londonguardian.co.uk © Guardian News and Media Limited 2010