New targets to achieve 33 per cent female representation on FTSE 350 boards by 2020 will boost investor returns, the Investment Association says.
The Hampton-Alexander Review was released by the government this morning and expands on efforts to double female representation on FTSE 100 boards to 25 per cent in the five years to 2015 – a target that was achieved.
Andrew Ninian, IA director of corporate governance and engagement, says improving female representation in senior leadership and on company boards benefits company performance, investor returns and the wider economy.
Research released by McKinsey last year showed for every 10 per cent increase in gender diversity in UK senior executive teams EBIT increased 3.5 per cent.
Ninian says investors have a role to “encourage, support and challenge companies to achieve the targets set by Hampton-Alexander Review.”
“As significant investors in UK companies, the Investment Association continues to believe that the voluntary and market-led approach is the best means of delivering the required change.”
In the FTSE 350 women currently account for 7 per cent of executive directors and 15 companies have all male boards.