Gender diversity lags dramatically in AIM boardrooms

13 June 2024 3 min. read
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The push for gender equality in the board room is hitting a glass ceiling among AIM listed businesses. According to research from Indigo, fewer than one in six AIM board roles are currently held by women.

Diversity within the boardroom has become an increasingly important issue for businesses globally, both in terms of the business case, in terms of compliance, and, increasingly, in terms of wider social trends towards inclusive practices. Women in board roles can act as role models to encourage others to participate in the business world, and help firms to see where their weak points are in supporting more women into senior roles.

However, progress remains slow – and in some sectors of the UK economy, there is a real danger that businesses could be rowing back against their diversity efforts of the last decade. New research by corporate governance expert firm Indigo suggests that AIM listed companies in particular are struggling to keep pace with their competitors, when it comes to gender diversity in the boardroom.

Gender diversity lags dramatically in AIM boardrooms

Developed in collaboration with ESG-data specialist, Addidat, the ‘Gender Diversity in AIM Company Boards: Progress Update March 2024’ report has highlighted the woeful lack of gender representation on AIM listed boards. A follow-up to a similar review from last year, the paper tracks the slow rate of progress to increase the proportion of women appointed to smaller listed company boards.

According to the study, the number of AIM boards with no women at all has fallen by 5% over the last year. But that figure still stands at 37% – meaning more than one-third of firms in the sector have no women in their senior ranks. And while a majority of firms might have at least some women representing in their board, that representation is mostly minimal.

Showing just how far behind the curve smaller UK listed businesses are in contrast to the FTSE 350 and the UK’s largest private companies, while an average FTSE 350 company board comprises 42.1% women, only 8% of AIM companies have boards where 40% or more of their directors are women. In fact, on average fewer than one in six AIM board positions are held by a woman.

Gender diversity lags dramatically in AIM boardrooms

Not all AIM companies have poor records on director diversity. Around 5% of AIM companies, have two or more women occupying the most senior roles – chief executive, chief financial officer, chair or senior independent director. And 22% of such companies have one woman in a senior role. But there is also a funding-gap at play here which may be hampering inclusion efforts of mid-market operators.

The researchers found that gender diversity was especially poor in smaller AIM firms. Boards made up exclusively of men were most common among small companies – with the average portion of board roles held by women under 10% at companies with market cap of under £10 million. This rose to just under 30% for firms with market cap between £750 million and £1 billion.

Speaking on the findings, the researchers concluded, “The advances that have been made within these larger listed companies demonstrate what can be achieved when meaningful expectations are set for progress on gender equality within boards. It may be that a more formal system of targets, similar to those championed by FTSE Women Leaders, is now needed to give greater impetus and drive faster progress such as is now being seen in larger listed businesses. Boards of individual AIM quoted companies remain responsible for actively considering their own composition and for developing director succession plans that will deliver the proven advantages for their investors and other stakeholders, that are available from greater diversity.”