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News digest 08/07/16: Female board appointments slow to 5-year low

08 July 2016 by Henry Ker

Female board appointments slow to 5-year low - read more

The latest governance stories in the news

Female board appointments slow to 5-year low

The number of women being appointed to the boardroom of Britain’s top companies has slowed dramatically. According to the new research, 'The female FTSE board report 2016' led by the Cranfield University School of Management, between September 2015 and March 2016 just 24.7% of new board roles went to female candidates, the lowest figure since 2011.

Last October, Lord Davies published his report on the five-year drive to increase female representation on FTSE 100 boards to 25%. The target was exceeded – at 26.1% − and has been maintained since (still 26%).

However, the slowdown in new female appointments is a worrying sign and raises concerns that the new target of 33% in the FTSE 350 by 2020 may not be reached unless changes are made. Sir Philip Hampton, who is chairing the new government-backed review of women on boards, has said he is determined to ‘kick-start’ the initiative following the ‘a pause in progress’.

The report also showed that the number of female executive directors at FTSE 100 companies has fallen to 20 from 22 in 2015. This chimes with concerns that companies could be paying lip-service to the diversity drive by only increasing the number of female NEDs.

Sir Phillip accepted there were a ‘trivial’ number of executive women, emphasising a key priority is to increase the pipeline of senior women rising through the ranks at firms.

 

Statutory inquiries by the Charity Commission halves

The Charity Commission opened half the number of statutory inquiries last year, compared to the previous year. In the year ending March 2016 the regulator opened 53 inquiries – a 48.5% drop from the 103 inquiries in the previous year.

However, the Commission opened 1,327 compliance cases, an increase of 145 on the previous year, and there was a minor increase of instances of the Commission using its legal compliance powers − 1,073 times, up from 1,062.

The regulator said the reason for the decrease in statutory inquiries was because charities had repeatedly failed to file accounts. This led to the rise in compliance cases and earlier intervention by the Commission.

 

FCA fines fall by 99% in a year

Fines imposed by Financial Conduct Authority in the first half of this year have fallen to to £7.2 million from the £819 million in the same period last year. The drop has been attributed to personnel changes and a heavy workload for staff, combined with a less aggressive approach taken by the regulator − although the figures for last year were inflated by several large fines on banks for rigging exchange rates. The number of fines has also fallen, down to 13 from 24 in the first half of last year.

The figure is less than 1% of the previous year’s value and follows a period of turbulence after Martin Wheatley stood down as Chief Executive last September, before being replaced by Andrew Bailey from the Bank of England.

 

Pensions need protection from takeovers

The Pension Regulator needs new powers to block company deals to ensure that employees and their pensions are protected from company collapses, according to Lady Judge, the former Chair of the Pension Protection Fund.

Lady Judge said the regulator was not able to deal with situations like the BHS collapse, which is currently in administration after being sold by Sir Philip Green to Dominic Chappell for £1 last year, and struggling with an estimated £571 million pensions deficit.

Lady Judge was quoted by the Financial Times as saying, ‘The regulator should have the right to approve or disapprove any corporate transaction that might disadvantage pensioners. If it had had the power, we would not be in this situation.’

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