Women made up more than half of new FTSE 350 boardroom directors last year as companies came under pressure to improve the gender balance of their top management.
But about two-thirds of the seats were filled by retired executives as well as those with previous board experience — among the highest proportions in Europe — raising doubts over the corporate world’s commitment to boardroom diversity.
More than four-fifths of the roles were taken by white people, with the majority of the remainder coming from Asian backgrounds. Just 3 per cent of new directors were black.
Heidrick & Struggles, the executive headhunters, said UK boards were making significant progress in gender diversity but had much further to go on racial and ethnic inclusion.
It added that the high percentage of retired executives suggested that there was still a reliance on traditional sources of board directors, rather than through building broader and more diverse networks.
Heidrick & Struggles found that of 362 board seats filled in 2020, almost half the directors were, or had been, chief executive or chief financial officer of a company. The firm found that many more boards in other European countries were increasingly seeking active, rather than retired, executives given their operational knowledge.
It is the second year in a row that the UK had more women than men appointed to board seats, with the 51 per cent female share above the EU average of 48 per cent.
The government-backed Hampton Alexander review that ended in February had been pushing boards to appoint more female directors. It achieved its target of more than a third of board positions on FTSE 100 and FTSE 250 companies by December 2020.
But Heidrick & Struggles highlighted that many of the new appointments were for non-executive roles, with far fewer female top executives.
Kit Bingham, partner and head of UK board practice at Heidrick & Struggles, said: “The place where more needs to be done is in the executive suite.”
He said research showed that boards were facing often conflicting pressures of recruiting seasoned, experienced board directors while also ensuring greater diversity with candidates from outside the listed sector.
The rise of virtual board meetings could allow more people from outside the UK with different skills to take board roles, Bingham added. Heidrick & Struggles said boards were likely to appoint significantly more directors from beyond Europe in the coming years.
In separate research published on Thursday, PwC said the gender pay gap in the UK continued to narrow for companies that had reported their 2020/21 data, moving from an average of 14.3 per cent in 2017-18 to 12.5 per cent in 2020-21.
More than three-quarters of companies have delayed reporting, however, in line with the extension granted by the government because of the impact of the pandemic.