New IES commentary with E-reward analysis deepens understanding of gender balance on FTSE boards

IES News

1 Dec 2017

New research highlights the interplay of gender-related remuneration and representation issues. The E-Reward report, with commentary from IES’ head of HR consultancy, Duncan Brown, presents analysis of data held on the E-reward Summit Database of 3,395 executive and non-executive directors in FTSE 350 companies.

The report presents the relationship between remuneration and representation at senior levels, and suggests that, while the proportion of female directors is on an upward trend, for both executive and non-executive roles, women tend to be employed in positions of less responsibility and influence, and therefore of lower pay.

Although issues of gender pay discrepancies and female representation are linked, they are not interchangeable. The findings suggest that moving closer to equality on board representation may not in and of itself lead to greater gender pay parity, as many of the newly published gender pay gap reporting narratives seem to assume. Wider changes in government and employer policies may also be required, a conclusion also reached in IES’ research for the Equality and Human Rights Commission (EHRC) on what works in closing gender pay gaps.

The report’s analysis aims to build on the findings of the Hampton-Alexander Review, which considers female representation at senior levels and whose latest report found that continued progress is being made towards the target of achieving 33 per cent women in senior leadership positions in UK boardrooms by 2020. This E-reward report encompasses a more extensive range of gender breakdowns than in the Hampton-Alexander analysis, as well as more data on remuneration and shareholding levels.

Other findings in the report include comparisons of remuneration at senior levels between men and women. This shows that the median male total remuneration levels for senior executive and non-executive posts were almost all higher in comparison to those of female incumbents. Women are less likely to hold higher paying executive posts such as chief executive, and committee chair roles for non-executives. The highest proportion of women-held posts, interestingly, is remuneration committee chairs.

The report does, however, highlight progress in representation amongst those directors that have been in post for one year or less, and this offers some optimism for the future. The proportions of women in certain roles are continuing to rise with, for example, 31.7 per cent of new non-executive directors being women.

Read the full report and commentary